Construction Management Guide

254 Responses to “Ask CMGUIDE”

1. M A Naszer Says:
   February 14th, 2009 at 11:02 pm

   In FIDIC 1987/92 (foruth Edition) Contract Conditions;

   Is there any time frame or time limit in replying to the Contractor regarding to the variation issuies, such as teh disputes in the variation amount calculation or in teh methode adopted to value of teh varied works etc.

   As I know about the 14 day contractual issue to reply to letters, but do VO`s fall under the same thing or something else?

   Plese reply to me at you earliest convinience.

   Thanks and regards
   Naszer

   [Reply]

   

   Samer Skaik Reply:
   July 1st, 2009 at 4:15 pm

   Dear Mr. Naszer,
   Unfortunately, There is no specific deadline stated in FIDIC 78 or 92, however, Engineer should complete the determination within a reasonable time and should not delay it.
   Refer to clause 1.5 of Fidic 1992 which states:
   “Wherever in the Contract provision is made for the giving or issue of any notice, consent, approval, certificate or determination by any person, unless otherwise specified such notice, consent, approval, certificate or determination shall be in writing and the words “notify”, “certify” or “determine” shall be construed accordingly. Any such consent, approval, certificate or determination shall not unreasonably be withheld or delayed.”
   ———
   Moreover, the 14 days time frame for the engineer to reply on letters or submittals is not contractual unless it is part of contract documents. Sometimes, the two parties agree on the time frame during the kick-off meetings.
   We advise you follow this link to have more information:
   http://cmguide.org/archives/31
   Regards..
   Samer H Skaik

   [Reply]

2. Naszer Says:
   February 15th, 2009 at 10:57 am

   Dear Sirs,

   Thank You very much for the prompt response provided for my query and I remain Thankful to you always.

   Furhter I would to ask one more question as:

   In the same Contract (Fidic 87/92)

   If the Main Contractor wishes to remove one of his Subcontractor and the Main Contractor undertooks the remaining Works to do by himself. The Sub Contracted Works is the MEP Works.

   Could you kindly claryfy, if any contractual issues to be covered or considered or noticed from the part of the Engineer as well as from the Employer, while the Contractor changing/removing this subcontractor?

   Thanks and Regards

   [Reply]

   

   Samer Skaik Reply:
   July 1st, 2009 at 4:16 pm

   Hello Naszer,
   Firstly, you need to examine your MEP subcontract agreement for termination clause. Usually, it should go into strict procedure prior to be contractually effective.
   Secondly, You are not allowed to carry any works on site on behalf of your specialist subcontractor without prior consent of the Engineer.
   I refer you to clause 4.1 of FIDIC 1992, where it states the following:
   The Contractor shall not subcontract the whole of the Works. Except where otherwise provided by the Contract, the Contractor shall not subcontract any part of the Works without the prior consent of the Engineer. Any such consent shall not relieve the Contractor from any liability or obligation under the Contract and he shall be responsible for the acts, defaults and neglects of any Subcontractor, his agents, servants or workmen as fully as if they were the acts, defaults or neglects of the Contractor, his agents, servants or workmen.
   Provided that the Contractor shall not be required to obtain such consent for:
   (a) the provision of labour, or
   (b) the purchase of materials which are in accordance with the standards specified in the Contract, or
   (c) the subcontracting of any part of the Works for which the Subcontractor is named in the Contract.
   I trust the above clarify the issue..
   Regards,
   Samer H Skaik

   [Reply]

   

   Mohamed Shafik Reply:
   December 22nd, 2009 at 5:23 pm

   Dear Sir,

   Allow me to express a different interpretation.

   Based on the Subclause you referred to (4.1), it dealt only with conditions regarding how the Main Contractor should subcontract works, but nothing in the clause prevented the Contractor from undertaking the Works of any of his Subcontractors by himself unless he obtains the consent of the Engineer, it only specified that the Main Contractor should obtain the said consent when subcontracting.

   Can you kindly clarify on which part of Subclause 4.1 you based your advice (or if there is another clause we should be referred to)

   Thank you for your help

   [Reply]

   

   Construction Management Guide Reply:
   December 22nd, 2009 at 8:56 pm

   Dear Mohammad,

   I really thank you for your valuable opinion.
   I based my opinion from my understanding that this specialist subcontractor is named in the contract. Accordingly, the statement given up is correct since the tender price has considered the appointment of this subcontractor and prior consent is required to do the work on his behalf to verify the quality measures.

   However, your opinion is still valid and correct if the subcontractor is neither named nor nominated.

   Thanks alot.

   [Reply]

3. DORIAN A. ANSARI Says:
   April 9th, 2009 at 3:46 pm

   I am Employer and am in process of suspending and later terminating my Consultant. Contract is based on fidic. What pros and cons I shall be facing?

   1- is it possible I will get all the work done by consultant? which I ofcourse paid for?
   2- Am I obligated to pay him extra?

   Please advise

   Dorian

   [Reply]

   

   Samer Skaik Reply:
   October 8th, 2009 at 8:53 am

   This answer is received from our consultant Mr. Rey Madrono

   Dear Dorian:
   The premise of your query appears to us that you are dissatisfied with the services of your consultant, that reason of which you have not indicated that would have guided us to profound on our advise.
   Suspending the contract with your consultant and terminating him later, if this is your intention, may not be the best idea unless you have a valid reason that is legally sustainable not only under the FIDIC clauses but also under the prevailing law, the Civil Code of UAE.
   Suspending a contract in the guise of termination, especially if suspension exceeds 56 days pursuant to Sub-Clause 27.1 of the FIDIC White Book creates an implied termination of contract under the Civil Code. This manner of “termination” exposes the employer to possible compensatory and other forms of damages because the law creates a presumption of “bad faith” on the employer. Remember that FIDIC types of contract are what we lawyers consider as “Adhesion” contracts under the Civil Code for which clauses thereof are generally construed against the employer.
   View that the only ground for termination under Sub-Clause 27.1 is when the consultant is “not discharging his obligations” under the contract. However, as in any forms of contracts regulated by law, other grounds for termination by any party, such as culpable delay, do exists under the Civil Code of UAE. However, in the absence of sufficient facts conveyed by your query, we cannot expound on this matter any further.
   From the business and practical point of view, it is generally ill advised to terminate a consulting services midstream into the works of the consultant since this will entail re-execution of the works by another consultant resulting in further delays and additional costs, unless of course the consultant is really incompetent to do the works and perform its deliverables. If such is the case, you terminate the services with damages against him for breach of contract.
   A new consultant will have to redo or re-execute the works from the start to forestall any possible copyright infringement and, which is most important, to obviate its decennial liability as “design engineer” under the provisions of the Civil Code.
   The possiblity of getting all the work done by the same consultant will depend on how you get him into performing his tasks within the parameters of your agreement. It appears to us that you may have to grant him additional time for this purpose.
   Your obligation to “pay extra” upon termination of services (assuming this is what your query means) will depend on the grounds of termination. Generally, however, any necessary work or expense incurred by the consultant is regarded as “exceptional services” pursuant to Clause 28 of the FIDIC White Book and entitles the consultant to “extra” payment. Such extra payment, furthermore, may be tempered with any delay penalty imposable against the consultant assuming a penalty clause is provided under the particular conditions of your consultancy agreement.

   Rey Madrono

   [Reply]

   

   MG Reply:
   November 9th, 2009 at 2:00 pm

   What about if the Termination for Employer’s own convinience is allowed in particular conditions?

   Is such termination recognised by UAE law?

   [Reply]

   

   Construction Management Guide Reply:
   November 9th, 2009 at 10:52 pm

   Dear MG,
   This issue is under debate. I quote here a wonderful answer from an article published before in CMGUIDE:

   “For muqawala (contracts of work), civil code articles 892 to 896 set out the legal framework, with article 892 stating: ‘A contract of muqawala shall terminate upon the completion of the work agreed or upon cancellation of the contract by consent or by order of the court.’

   Within the general provisions on contracts, article 267 states: ‘If the contract is valid and binding, it shall not be permissible for either of the contracting parties to resile from it, nor to vary or rescind it, save by mutual consent or an order of the court, or under a provision of the law.’

   The requirement for ‘mutual consent’ raises issues as to whether an agreed termination for convenience clause in a signed contract would in itself be accepted as that required element of ‘mutual consent’. Article 218(1) states that a contract will not be binding (despite its validity and effectiveness otherwise) if there is a condition allowing one party to cancel the contract without mutual consent or an order of the court.”

   http://cmguide.org/archives/20

   You can also refer to this link for better understanding:
   http://www.tamimi.com/files/articles/Construction/Coping_With_Terminatin_Aug08.pdf

   Regards..

   Samer Skaik

   [Reply]

4. ayham Says:
   April 12th, 2009 at 1:40 am

   I have this case, because of payment issues between the engineers and employee the engineer DENIED to make any inspection for more 12 days,, how I can support my claim
   Thanks

   [Reply]

   

   Samer Skaik Reply:
   July 1st, 2009 at 4:16 pm

   Dear Ayham,
   most types of contracts provides contractual entitlement for such cases in favor of contractors.
   According to Fidic 1992, clause no. 44.1 (d) states that in the event of any delay, impediment or prevention by the Employer, the contractor will be entitled for extention of time. The Engineer negligence is alway considered within the responsibility of the client who appointed him.
   Also, you may refer to clause 6.3 and 6.4 regarding diruption of work which should be followed to support your entilement for time and cost. I list below the relevant clauses for your reference..
   6.3 Disruption of Progress
   The Contractor shall give notice to the Engineer, with a copy to the Employer, whenever planning or execution of the Works is likely to be delayed, or disrupted unless any further drawing or instruction is issued by the Engineer within a reasonable time. The notice shall include details of the drawing or instruction required and of why and by when it is required and of any delay or disruption likely to be suffered if it is late.
   6.4 Delays and Cost of Delay of Drawings
   If, by reason of any failure or inability of the Engineer to issue, within a time reasonable in all the circumstances, any drawing or instruction for which notice has been given by the Contractor in accordance with Sub-Clause 6.3, the Contractor suffers delay and/or incurs costs then the Engineer shall, after due consultation with the Employer and the Contractor, determine:
   (a) any extension of time to which the Contractor is entitled under Clause 44, and
   (b) the amount of such costs, which shall be added to the Contract Price,
   and shall notify the Contractor accordingly, with a copy to the Employer.
   Regards,
   Samer Skaik

   [Reply]

5. ayham Says:
   April 12th, 2009 at 9:18 pm

   Dear Samer
   thank a lot for you answer ,
   can i refer same to the FIDIC-1987 4th Edition

   thank

   [Reply]

   

   Samer Skaik Reply:
   July 1st, 2009 at 4:17 pm

   Yes Ayham,
   Fidic 1992 is an ammendment of Fidic 1987 and doesn’t have big difference..
   Good Luck

   [Reply]

6. ayham Says:
   April 16th, 2009 at 11:36 pm

   Dear Sir
   How I can support a claim from the FIDIC-1987 4th Edition , and 1992 is these 4 case
   1- The engineer not retains or delays the inspection after 24 hours of the submittal the inspection?
   2- Delay the RFI more than 14 days as it mention in the contract?
   3- If the contract between the employee and the engineer effect the progress in the site as example ” this case the contract for MEP work with the employee is a part time max for 2 days and for a civil work mention as usually for 6 days a week 8 hours per day and the contractor contract is also 6 days a week 8 hours per day” how I can claim for this case?
   4- The change for the drawing?
   I am looking forward for your answer for these 4 cases with thanks

   [Reply]

   

   Samer Skaik Reply:
   July 1st, 2009 at 4:17 pm

   Hello Ayham,
   For Q1, Q2 and Q3, you just need to know that the Engineer should not delay or hold the approval unreasonably. Refer to clause 1.5. FIDIC is silent about the timeframe for that, so you need to check your contract documents if it states so and act accordingly.
   for Q4, briefly, you need to examine the nature of changes. Refer to clause 51.1 to see if such change constitutes a variation or not. If yes, you need to notify the Engineer of that variation pursuant to clause 53.1 and ask for formal variation order prior to proceed.
   Further, you need to see if such variation will prolong the project date for completion or not. You can refer to clause 44.1 to support your claim for extension of time.
   Regards
   Samer Skaik

   [Reply]

7. Felicia Cheah Says:
   June 25th, 2009 at 11:11 am

   Felicia Cheah Says: Your comment is awaiting moderation.
   June 25th, 2009 at 11:08 am

   Dear Sir,
   Correct me if I am wrong. My experience under PAM (Malaysia) condition of contract is – when employer defaults in payment, the main contractor has no other alternative except to terminate the contract. At times, the main contractor wishes to continue with the intention is to slow down, however, the main contractor should not STOP WORK, with the slow down action, the main contractor received instruction from the SO that work progress is slow and may not give extension of time. On such situation, what is the better action to take since the Employer is still at the upper hand of not paying yet not allow to slow down not to mention stop work ?

   [Reply]

   

   Rey Madrono Reply:
   July 1st, 2009 at 4:19 pm

   Hi Cheah:
   PAM (short for Pertubuhan Akitek Malaysia or Organization of Architects, Malaysia) Conditions Contract is commonly used in private construction while the PWD Conditions of Contracts applies over Government projects. Both contracts, including similar contract Forms (FIDIC, JBC, AAA, etc) are subject to the provisions of Contracts Act of 1950 (Act 136, Revised 1974). We note that the provisions under the Contracts Act are similar to clauses on “Obligations & Contracts” that one will ordinarily find under most Civil Codes.
   Going now to your query, we hereby reproduce Clause 52 and Clause 55 of the Contracts Act of Malaysia which states that:
   ‎”52. When a contract consists of reciprocal promises to be simultaneously performed, no promisor ‎need perform his promise unless the promisee is ready and willing to perform his reciprocal promise.”.
   “‎55. When a contract consists of reciprocal promises, such that one of them cannot be performed, or ‎that its performance cannot be claimed till the other has been performed, and the promisor of the ‎promise last mentioned fails to perform it, the promisor cannot claim the performance of the reciprocal ‎promise, and must make compensation to the other party to the contract for any loss which the other ‎party may sustain by the non-performance of the contract.”
   Construction contracts involve reciprocal obligations in the sence that the Employer is obliged to pay the Contractor, and the latter is reciprocally obliged to execute the Works. If one party defaults in the performance of his reciprocal obligation, the juridical tie is severed pursuant to the provisions of Clause 52 and 55 of the Contracts Act and the Contractor has all the right to stop the work. The Employer CANNOT sue for specific performance because he is guilty of “prior breach”, and can even be sued for general damages by the Contractor for such breach.
   Slowing down his construction activity is a prerogative of an “unpaid” contractor notwithstanding any contract provision preventing such recourse. Threatening the contractor with non-extension of time in case of delay is an exercise in futility and will not prosper under Act 136 of 1950 because the “proximate” cause of the delay was the default of the Employer.
   The better action in case of breach of the employer to pay the contractor his payment certificates under the Contracts Act (never mind the agreement because clauses are generally favorable to the Employer)is, sadly, to invoke Clauase 52 or 55 of the law and STOP the works. This will compel the Employer to pay, and any delay occasioned by the stoppage cannot be taken against the contractor because it is the law that affords him the right to take such extreme measure. (Dura lex sid lex- the law maybe harse but it is the law

   [Reply]

   

   Felicia Cheah Reply:
   July 1st, 2009 at 4:19 pm

   THANK YOU VERY VERY MUCH. IT IS INDEED A MAJOR DECISION TO CROSS
   THE LIMIT TO STOP OR SETTLE AMICABLY VIA MUTUAL TERMINATION.
   REGARDS

   [Reply]

8. Rana B. Anastas Says:
   July 1st, 2009 at 5:12 pm

   As our contract is based on FIDIC 1987/92 (foruth Edition) Contract Conditions; would appreciat your feedback with regards to the following:

   As a main contractor, we received instructions pretaining to a various number of variations which have not only cost but time impact. On that basis, we have submitted an extension of Time claim of which we are still awaiting response to.

   In the meantime, the consutlant/client is requesting a reduction in the agreed percentage monthly rate of our prelims specified within our contract.

   My questionis this:
   Is the consutlant / Employer within his contracutal right to reduce the percentage rate of prelims within our monthly payments, while the extension of Time claim is still in affect?

   [Reply]

   

   Samer Skaik Reply:
   July 1st, 2009 at 5:16 pm

   Hi Rana,
   To answer you precisely, please clarify the following:
   - Type of contract (Lump sum or remeasured)
   - The prelims have detailed break down in BOQ or not?
   - When you have submitted your claim and what is the original date for completion?
   Regards,
   Samer

   [Reply]

9. Rana B. Anastas Says:
   July 1st, 2009 at 5:35 pm

   Dear Samer,

   Theseare the responses to your queries:

   - Contract type is Lump Sum
   - The prelims are only itemized as unit rates within BOQ. However, a detailed distribuition of Prelims throught the contract duration was subsequently submitted and approved by consutlant.
   - The claim was submitted in Mid February-2009 and original date of completion is November 08th, 2009.

   Regards,
   Rana

   [Reply]

   

   Samer Skaik Reply:
   July 2nd, 2009 at 9:13 am

   Dear Rana,

   The Engineer has the right to reduce the percentage of prelims for the work done in your interim payments if -and only if- the actual percentage seems to him less that what you have claimed.

   Relating such reduction to your EOT claim is totally irrelevant, since your prolongation cost will be dealt separately and added to the revised contract value. You will be entitled for the full amount of prelims as stated in your BOQ in addition to any prolongation cost resulting from EOT claim.

   Some times, the Engineer may find out that the unit rate of an item in prelims is exaggerated, therefore, he has the right to fix a rate that he believes it is fair and appropriate which is contractually sound.

   I wish I understood your question properly and my answer will satisfy your question..

   Don’t hesitate to contact us for any further clarification.

   Samer

   [Reply]

10. Engineer Asif Jamil Says:
    July 11th, 2009 at 1:14 pm

    Dear Sir,
    I have one lumpsum contract with the following dates.
    Start date 7th October 2007
    Finish Date 22nd June 2008
    Approved EOT 207 Days (approved by consultant)
    In our BOQ we don’t have breakdown for priliminaries, we have mentioned the items but not the unit price, for all priliminaries items we have mentioned lumpsum amount say 1.6 million.
    but during construction period Engineer/consultant asked for detailed breakdown of preliminaries so we the contractor provided them detailed breakdown for preliminaries and he approved during construction period.
    Now my questions are as under:
    1. for prolongation claim will Engineer consider breakdown of preliminaries which we have provided them(if yes please tell me clause of FIDIC 1987)
    2. in preliminaries section we have not consider our head office overhead, in that can we claim for overhead please reply me as per FIDIC clauses

    regards

    [Reply]

    

    Samer Skaik Reply:
    July 12th, 2009 at 8:45 am

    Dear Asif Jamil,
    I assume that the EOT you got entitles you for the relevant prolongation cost. However, I need to know the reason of the EOT to help you better with my references. For example, if the EOT is issued because the Engineer or Employer has delayed in issuing you the drawings, then you need to refer to clause 6.4 which says:

    Delays and Cost of Delay of Drawings

    If, by reason of any failure or inability of the Engineer to issue, within a time reasonable in all the circumstances, any drawing or instruction for which notice has been given by the Contractor in accordance with Sub-Clause 6.3, the Contractor suffers delay and/or incurs costs then the Engineer shall, after due consultation with the Employer and the Contractor, determine:

    (a) any extension of time to which the Contractor is entitled under Clause 44, and

    (b) the amount of such costs, which shall be added to the Contract Price,

    and shall notify the Contractor accordingly, with a copy to the Employer.

    This clause will give you the entitlement to claim the prolongation cost. The actual cost will only be considered here including site overheads, head office overheads, s/c claims, financial charges etc…

    Now refer to clause (1) of cost definition which is very clear regarding inclusions of such costs in the contract:

    (g)(i) ”cost” means all expenditure properly incurred or to be incurred, whether on or off the Site, including overhead and other charges properly allocable thereto but does not include any allowance for profit.

    However, the Engineer -who should be impartial party- has the right to fix the rate which he believes it is appropriate and reasonable unless you can verify how it was derived by the available contemporary records, invoices, site diary records etc…

    Trusting my answer will be to your satisfactory.

    Thanks and Regards..

    Samer

    [Reply]

    

    Asif Jamil Reply:
    July 12th, 2009 at 9:49 am

    Dear Sir,
    still i m confused just tell me the following

    for prolongation claim will we take recurrent items and rates from our BOQ(i.e. preliminaries) or there is no link between prolongation claim and preliminaries in BOQ OR there is no hard and fast rule and it is only the Engineer right that procedure he follows.

    [Reply]

    

    Samer Skaik Reply:
    July 12th, 2009 at 10:33 am

    BOQ rates can only be used if the rates are applicable, appropriate and reasonable. Refer to clause 52.1 for evaluation of variations for example in which the concept is clear and can be used as a reference for prolongation cost determintation.
    To sum up, your claim calculation should be reasonable and justified, to have a strong case, however the Engineer still have the power to fix rates if in his opinion it seems inappropriate or inapplicable. Refer to clause 52.2 for further details.

    [Reply]

11. Munir Anwar Says:
    July 14th, 2009 at 1:36 pm

    Dear Sir,
    My Project detail is as under: –
    Country = Pakistan
    Date of Commencement = 25th of Sep, 2005
    Date of Completion = 25th of Sep, 2010
    Completion Duration = 05 Years
    Contract Based on = FIDIC – 1978
    Nature of Work = Contract of Civil work (Roads, Bridges, Rail & Road Tunnel)
    The progress of work is suspended due to Law & order and security reasons in the project area, project is suspended in two steps:
    1) From 08 May 2009 to 31 May 2009 was suspended by the Engineer under clause 20.4 (a), (b) & (e) (Employer’s Risks) and clause 20.5 (Force Majeure) and applying the clauses 65.2, 65.6, 20.1 & 54.2.
    2) From 01 June 2009 to 30 July 2009 is suspended by the Engineer under clauses 40.1, 20.4, 20.5, 40.3 & 65.2.
    The Total project is suspended for 84 days.
    Now, my question/problem is that, Contractor is submitted the Claim against suspension of progress of work (from 08 May to 31 May – 2009, (First suspension)), that includes the Idle Machinery (Clause-54.2) which is now parked Idle at site as directed by the Engineer under clause 54.2.
    CONCLUSION: Dear sir, plz tell me that how i proceed, and what method i will follow for the machinery, bcuz some of the machinery is rented.
    thank you,
    hope for early reply.

    [Reply]

    

    Kumar Reply:
    July 16th, 2009 at 4:20 pm

    Your question is not clear. However, I have very simple answer, see whether it fits for you.

    The cOntractor should submit the rental charges for the machinery and the same amount will be entitled by the Contractor for the suspended period. If idle, no fuel charges will not come.

    [Reply]

    

    Samer Skaik Reply:
    July 19th, 2009 at 8:41 pm

    Dear Munir,
    You have two issues here. Firstly, you need to submit your extension of time claim to present your case. As per the given reasons of delays, you will entitled for the prolongation cost resulting from the extension of time. You need to claim for actual costs and damages incurred with all relevant substantiations such as invoices, quotations, etc…
    Secondly, as part of your obligations under the contract, you have to mitigate the damages and expenses that would result from the act or in-act of the Employer. With regard to machinery for example, you need to study if you can send the machinery to other running project or stop its rent and the Employer should be aware of your mitigation measures. however, you will be entitled for any loss or damage such as machinery rental, fuel consumption, security, etc.. in addition to any other running cost.

    Regards..

    [Reply]

12. Kumar Says:
    July 14th, 2009 at 2:31 pm

    Dear Sirs,

    I am working in Dubai for a Contractor for a project consisitng several buildings.

    Before completing the testing and commission, the Employer rented the flats of some of the buildings. Civil works almost completed but MEP testing and commission and some other defects are being carried out. My questing is as follows.

    1) We have demanded the TOC under the clause 48.2(c) of FIDIC 1987. However, Consultant refused to issue TOC as stating that the testing and commision for any building should complete before issuing the TOC. is this decision correct?

    2) Employer said that they will enforce the Liquidated damages for the period from Time for Completion and the date in TOC. In that case, they are going to put LAD even for the period of employer getting beneficial occupation. Is this correct?

    3) Can we demand at least the TOC for completed civil works excluding MEP works of any one buildings which is outstanding?

    I wish that I will get a comprehensive reply for this qestion as soon as possible.

    [Reply]

    

    Samer Skaik Reply:
    July 19th, 2009 at 9:03 pm

    Dear Kumar,

    Here we refer to clauses 48.2 and 48.3 of FIDIC 1987:

    48.2

    Similarly, in accordance with the procedure set out in Sub-Clause 48.1, the Contractor may request and the Engineer shall issue a Taking-Over Certificate in respect of:

    (a) any Section in respect of which a separate Time for Completion is provided in the Appendix to Tender, or

    (b) any substantial part of the Permanent Works which has been both completed to the satisfaction of the Engineer and, otherwise than as provided for in the Contract, occupied or used by the Employer, or

    (c) any part of the Permanent Works which the Employer has elected to occupy or use prior to completion (where such prior occupation or use is not provided for in the Contract or has not been agreed by the Contractor as a temporary measure).

    48.3

    If any part of the Permanent Works has been substantially completed and has satisfactorily passed any Tests on Completion prescribed by the Contract, the Engineer may issue a Taking-Over Certificate in respect of that part of the Permanent Works before completion of the whole of the Works and, upon the issue of such Certificate, the Contractor shall be deemed to have undertaken to complete with due expedition any outstanding work in that part of the Permanent Works during the Defects Liability Period.

    Now let us see your questions in light of the above clauses:

    1) Occupation of part of work by the client should be done in good faith. The engineer has no right to prevent issuance of partial TOC based on clause 48.2 c. You can prevent the Employer to access the units till such TOC is issued. The current situation is neither contractual nor legal. Yuo need to consider the insurance related issues here as well since the client is not covered in your CAR insurance and he should have his own.

    2) This is neither contractual nor legal. Employer can’t posses as part of work without prior issuance of TOC by the Engineer. Legally, you can sue the Employer on the bases of absence of good faith which is the spirit of any contract.

    3) You can’t claim for TOC for any part of work if it is not subtantitally completed and the tests stated in the contract are not conducted. Contract is clear in this regard.

    My advice to you is to use your negotiation skills with your difficult Employer to reach into a fair settlement or suggest a mediator to resolve such conflict.

    Regards..

    [Reply]

13. Munir Anwar Says:
    July 20th, 2009 at 10:35 am

    Dear Sirs,
    thanks for reply, but still some confusion, i am working with Consultant (Engineer). the question is that, without the machinery rent, Contractor is entitled to claim other charges i.e. staff salaries etc. if Contractor is entiltled or not, give the clause references.
    regards,

    [Reply]

    

    Samer Skaik Reply:
    July 21st, 2009 at 8:47 am

    Dear Munir,
    you need to examine the cause and effect of any delay case by case to identify whether the contractor is entitled for prolongation cost or not. For example, suspension clause 40.2 b states the following:

    40.2 Engineer’s Determination following Suspension

    Where, pursuant to Sub-Clause 40.1, this Sub-Clause applies the Engineer shall, after due consultation with the Employer and the Contractor, determine:

    (a) any extension of time to which the Contractor is entitled under Clause 44, and

    (b) the amount, which shall be added to the Contract Price, in respect of the cost incurred by the Contractor by reason of such suspension, and shall notify the Contractor accordingly, with a copy to the Employer.

    So, the contractor will be entitled for compensation against any loss or damage incurred due to such suspension such as staff salaries, site office rentals, electricity, idle manpower, head office over head, subcontractors claims, etc…
    Refer to the definition of the term “cost” in FIDIC for more information..

    Regards,

    [Reply]

14. Iqbal KHAN Says:
    July 20th, 2009 at 1:48 pm

    Sirs
    I am working as Resident Engineer on road project in Pakistan. Before ask my question, let me explain the issue at present I am facing.
    The contractor who was the lowest for my project put a rebate on the entire BOQ items (8%) and the work was allotted to him. The Client due to some reason, replaced asphaltic base and wearing course (BOQ Item) with Bit Mac (Non BOQ) and now the same will be executed at site and the Variation Order now in process. The problem with is that: Shall I aplly rebate to the new item or not?
    Client is of the opinion that, this new item of Bit Mac is now part of BOQ and Rebate + Escalation will be applicable. While Contractor is demanding that as this is non BOQ item and the rebate shall only be applied on BOQ items.
    Is there any Clause or any other history in FIDIC or some where else to help me finalize the Variation Order? What shall I do?
    Thanks in advance.

    [Reply]

    

    Samer Skaik Reply:
    July 21st, 2009 at 8:59 am

    Dear Iqbal,
    the BOQ rate can only be referred to if it is appropriate and applicable. You need to read clause 52.2 thoroughly to understand the terminology of certifying the variations.
    In your case, I assume that the variation was initiated by the Engineer/Employer side. The BOQ rate with the associated rebate is used as a basis as applicable and reasonable. you can’t impose it if the contractor will lose money to perform variation works. However, to ensure value for money, you need to examine the new rate claimed by the contractor and compare the same with market prices. if matching, then it is wise to certify him accordingly.

    Regards..

    [Reply]

15. andrew matambo Says:
    July 21st, 2009 at 3:12 pm

    In our country, most locally owned building contractors do not grow as compared to the foreign owned. I want to know how building contractors grow and keep their capbilty without going into liquidation or insolvency.

    [Reply]

    

    Samer Skaik Reply:
    August 11th, 2009 at 8:59 am

    Hi Andrew,
    This depends onn many factors such as:
    - The market strength and stability.
    - Implementing strategic management in contracting organisations such as diversity and new products.
    - Outstanding top management skills.
    - Strong human resources.

    Regards,

    [Reply]

16. Noel Castillo Says:
    July 23rd, 2009 at 1:26 am

    Dear Sir,

    Subject: Determine How Many Projects One Project Manager Can Manage

    I manage projects from beginning trough end of construction. We manage the planning, design, ROW phase, construction phase etc… I was curious if the 15% of hours of effort would apply. What hours of effort do I use to multiply by 15%? Do I utilize only the construction hours of effort to determine how many hours of project management we will need for the life of the project?

    Please advise.

    Noel

    [Reply]

    

    Samer Skaik Reply:
    August 11th, 2009 at 9:00 am

    Hi Noel,
    Please refer to this article. You will find the answer there.
    http://cmguide.org/archives/1317

    [Reply]

17. Felicia Cheah Says:
    July 29th, 2009 at 1:12 pm

    Dear Sir,

    Of late, we are prospecting a sea reclamation project for refinery oil & gas, shoplots, housing estate. May I have your kind opinion that :-

    a) which form of contract is best recommended (self-funding, non-government project however Government approval’s needed) ? FIDIC, PAM, etc ?

    b) may I have any reference on this nature of project – ie. methods, design etc ?

    c) the design warranty part in particular, who should shoulder such ?

    d) Thank you very much. Regards

    Felicia Cheah

    [Reply]

    

    Samer Skaik Reply:
    August 11th, 2009 at 8:55 am

    Dear Felicia,
    FIDIC has many forms of contracts that can be suitable for different works such as civil works and M& E works. Please refer to this:
    http://www1.fidic.org/bookshop/

    For the interest of the project, you need to choose a contract form that you and the contractor are familiar with to avoid conflicts and ambiguities.

    Regards,,

    [Reply]

18. Nasair Says:
    August 8th, 2009 at 10:47 pm

    I have a lump sum project based on Fidic 87; there are a lot of variations in this contract.
    The question.

    Is the client and the consultant entitle to deduct the recovery percentage of the advanced payment for both the original items and the V.O
    Thank you

    [Reply]

    

    Samer Skaik Reply:
    August 11th, 2009 at 8:51 am

    Dear Nasair,
    In principle, Recovery of advance payment should be from the original scope of work which forms the contract price. it will not work if deduction will include variation works, since the recovery at the end will be more that obtained.

    However, check your contract and see if there is clear clause in this regard since FIDIC doesn’t mention such procedures.

    Regards..

    [Reply]

19. Imran Says:
    August 11th, 2009 at 1:34 pm

    What action should be taken by the Engineer pertaining to “Insurances” in case the contractor delays the compltion of works under FIDIC Form of Contract?

    [Reply]

    

    Samer Skaik Reply:
    August 13th, 2009 at 11:33 am

    Hi Imran,
    Your question is not clear. Do you mean liquidated damages or performance bond?

    [Reply]

20. Nasair Says:
    August 13th, 2009 at 5:24 pm

    Dear Sir,

    I Know that FIDIC is a re measurement contract however a lot of lump sum projects depend on FIDIC without changing any clauses.
    Kindly clarify what are the clauses which it should be changed and what are the problems might be happen in case of no changing to the FIDIC clauses And using it as it is as a general condition.

    Regards

    [Reply]

    

    Samer Skaik Reply:
    August 16th, 2009 at 9:03 am

    Hello Nasair,
    Generally, In any contract, there will be general conditions such as FIDIC and particular conditions that will supercede, add, delete or revise some clauses of FIDIC. To make the FIDIC 87 as a lump sum contract, you need only to delete the clause no. 55 and 56. In particular conditions, you need to include a new clause stating that the contract is a lump sum fixed price contract and is not subject to remeasurement.

    [Reply]

21. Ken Says:
    August 13th, 2009 at 6:25 pm

    I’m a subcontractor on a job and purchased material for the project. At the time I signed the contract I thought I would have no problem securing the required performance bond. The bonding company is giving me a difficult time and I’m wondering what kind of options I have with the GC and Developer. Like I said I already have the material in my warehouse. The developer has mentioned something called a CPC form. I’m not sure if that is correct. But my understading is that it would give him possesion of the material once they’ve paid for it even if it was in my warehouse. If this was done, then they might lift the bond requirement. Does anyone know where I can find this form? Or what other options are open to me?

    [Reply]

    

    Samer Skaik Reply:
    August 16th, 2009 at 9:23 am

    Hi Ken,
    Regarding CPC forms, you can search via the web to find the form or ask the employer to send it to you.

    Alternatively, you can negotiate other options with the employer. You can offer an open dated security cheque instead of performance bond or to get the first payment upon the delivery of materials site.

    [Reply]

22. DAN Says:
    August 20th, 2009 at 9:40 am

    Hi,

    A project has being executed under design-build contract (FIDIC form of contract). The Government introduced new toll gates for some particular roads inside the city but that some how affecting the project. There are some other alternate roads available, so that that toll can be avoided. The Contractor is claiming that this new toll gates is affecting the project cost (Claim placed under particular clause – changes in legislation). Did the Contractor entitle in this case? How about the G.C.Clause 26.1 Please advise.

    [Reply]

    

    Samer Skaik Reply:
    August 26th, 2009 at 12:54 pm

    Hi Dan,
    Firstly, you need to check the particular conditions of contract since legislation clause no. 70.2 is usually revised to be in favor of Employer. However, if it is not, the case should be studied carefully. If the introduction of the new toll gates took place after the date 28 days prior to the latest date for submission of tenders by the contractor, the contractor would be obviously entitled for all costs resulting from such event pusuant to clause 70.2.

    Clause 26.1 is only applicable for laws, legislations and policies that were considered or supposed to be considered by the contractor before the date 28 days prior to the latest date for submission of tenders.

    Regards.

    [Reply]

23. Nasair Says:
    August 20th, 2009 at 7:51 pm

    Hi,

    I have an item in BOQ which is Provisional sum
    , please clarify the procedures of implementing provisional sum items?
    The client or the engineer should request from the contractor to implement the item or not
    What is the meaning of the price mentioned in front of provisional sum items.

    Regards

    [Reply]

    

    Samer Skaik Reply:
    August 26th, 2009 at 1:02 pm

    Hi Nasair,
    I assume that you are dealing with FIDIC type of contracts. To understand the nature of provisional sums and how we deal with them in light of FIDIC 1987, refer to clause 58:

    58.1 Definition of ”Provisional Sum”

    “Provisional Sum” means a sum included in the Contract and so designated in the Bill of Quantities for the execution of any part of the Works or for the supply of goods, materials, Plant or services, or for contingencies, which sum may be used, in whole or in part, or not at all, on the instructions of the Engineer. The Contractor shall be entitled to only such amounts in respect of the work, supply or contingencies to which such Provisional Sums relate as the Engineer shall determine in accordance with this Clause. The Engineer shall notify the Contractor of any determination made under this Sub-Clause, with a copy to the Employer.

    58.2 Use of Provisional Sums

    In respect of every Provisional Sum the Engineer shall have authority to issue instructions for the execution of work or for the supply of goods, materials, Plant or services by:

    (a) the Contractor, in which case the Contractor shall be entitled to an amount equal to the value thereof determined in accordance with Clause 52,

    (b) a nominated Subcontractor, as hereinafter defined, in which case the sum to be paid to the Contractor therefor shall be determined and paid in accordance with Sub-Clause 59.4.

    Please don’t hesitate to contact us for further clarification.

    [Reply]

24. Sam Says:
    August 22nd, 2009 at 10:00 am

    Hi, My query is related to the performance bond.

    What are the procedures to liquidate a bond and the prerequisites that are required to be followed for it under the civil code of UAE. The supplier failed to perform his obligations within the time limit specified in the bond. Is a timely notice a condition precedent for liquidation, regardless of the ‘unconditional’ terms and conditions of the Bond. From where can i obtain the civil code of UAE?
    Please advice.

    [Reply]

    

    Samer Skaik Reply:
    August 26th, 2009 at 1:24 pm

    Hi Sam,
    I refer you to a useful article in CMGUIDE at:
    http://cmguide.org/archives/1438

    Particulary, I quote this section as an answer to your question:

    It is common practice for contractors to provide contractual security to an employer to guarantee its performance under the contract.

    Typically in the UAE, an employer would require the contractor to furnish an unconditional (on demand) bond to be issued by a reputable bank. Generally the terms of an unconditional on demand bonds are designed such that the bank will have to pay to the employers upon its demand without the need for the employer to prove that the contractor has defaulted or is in breach of its obligations under the contract.

    In circumstances where an employer (as sub developer) may face serious issues of liquidity, it may very well be the case that the demand made by the employer was not bona fide but with the ulterior motive of cashing on whatever funds that is readily available for its disposal. Another possible scenario in which an employer may call upon a performance bond is when the contractor becomes insolvent or bankrupt or is the subject of a company administration or receivership.

    Of course there are repercussions the employer will have to bear if it resorts to calling upon a bond in bad faith. However, in the mean time, the contractor will be out of pocket as the issuing bank may by then have liquidated the fund or property that was pledged to the bank as security for issuance of the bond.

    It is due to such extreme scenarios set out above that we consider contractors should try and negotiate with their employers to include certain conditions precedent before the issuing bank or the surety is obliged to pay. However in light of current market conditions it is highly likely banks will insist on keeping the nature of performance bonds unconditional to improve their security (recourse to funds) in the event of contractor default.

    [Reply]

25. Nasair Says:
    August 25th, 2009 at 5:56 pm

    Hi,

    Is the contractor entitled to take materials on sit in his payment even if that not mentioned in his contract.
    I have this case in a lump sum project based on FIDIC 87.

    Thank you

    [Reply]

    

    Samer Skaik Reply:
    August 26th, 2009 at 1:28 pm

    Hi Nasair,
    Please refer to clause 60.1 (c) where it shows your entitlement to include the cost of materilas on site in your payment. I enclose it below for your easy reference. However, if appendix to tender states zero percentage, then you will not be entitled to claim.

    60.1 Monthly Statements

    The Contractor shall submit to the Engineer after the end of each month six copies, each signed by the Contractor’s representative approved by the Engineer in accordance with Sub-Clause 15.1, of a statement, in such form as the Engineer may from time to time prescribe, showing the amounts to which the Contractor considers himself to be entitled up to the end of the month in respect of

    (c) the percentage of the invoice value of listed materials, all as stated in the Appendix to Tender, and Plant delivered by the Contractor on the Site for incorporation in the Permanent Works but not incorporated in such Works

    [Reply]

26. Anadi Says:
    August 27th, 2009 at 5:43 pm

    Hi Samer Skaik,

    Could you please let me know from where I can obtain a free copy of the FIDIC document i.e.

    The Conditions of Contract (International)
    For Works of Civil Engineeting Construction
    Fourth Ediion – 1987
    Reprinted 1992 with further amendments

    Thanks & Regards

    Anadi

    [Reply]

    

    Samer Skaik Reply:
    August 29th, 2009 at 3:41 pm

    Hi Anadi,

    Those documents have copyrights and it is unfortunetely unavailable as free of charge.

    [Reply]

27. Nasair Says:
    September 7th, 2009 at 5:05 pm

    Hi Sir,

    I have a lump sum project with some items prime cost based on Fidic 87.
    Do the client has the right to deduct the a mounts for items in BOQ which is not required to be done.

    Regards

    [Reply]

    

    Samer Skaik Reply:
    September 8th, 2009 at 1:26 pm

    Hi Nasair,
    The client has the right to omit any item which he sees not required to be done provided that he is not going to do it by himself or appoint others to do it. However, you need to be careful when assessing such omission. For example, if you are requested to remove the wooden doors for example from the scope. the omission will be calculated as follows:
    actual quantity X BOQ rate (if applicable) = omission amount
    This is because BOQ quantities are not the contractual quantities in which you are obliged to fulfill under the contract.

    Regards,

    [Reply]

28. David Robinson Says:
    September 24th, 2009 at 11:55 am

    Hi, Can snagging ever be an issue to stop a developer completing and handing over the development.

    In the development I am buying into in Dubai almost all apartments have issues such as broken tiles, badly painted walls dirty ceilings etc. Is there and argument to reject the proposed completion date on this alone.

    People have also been told that their snagging is complete by the developers snagging agent. When they turn up to inspect and find none of the items fixed they informed that these items will be corrected after completion during the Developer Liabilty Period. I have never heard of this DLP, will it cover the full snagging and what if the developer just does not fix the items?

    I would be most grateful for any opinions.

    [Reply]

    

    Samer Skaik Reply:
    September 27th, 2009 at 8:45 am

    Hi David,
    This mainly depends on the Contractor’s act with regard to his obligation under the contract towards the Employer. As per FIDIC forms of contracts, if the work is substantitally completed, then the Engineer must issue the taking over certificate upon the request of the contractor. Substantial completion is generally taken to refer to a sufficient degree of completion to enable the Employer to take beneficial use of the works concerned.

    “Defects Liability Period” means the defects liability period which is one year and calculated from the date of substantial completion of the Works certified by the Engineer. This to allow the contractor to complete any snags, outstanding works and remedy any defects.

    Thanks and Regards

    Samer Skaik

    [Reply]

29. vijay chhatwal Says:
    September 25th, 2009 at 7:34 pm

    hi
    as per FIDIC contract conditions red book (1987/92)edition, when can engineer give decision without consulting the client ?; and when should he take clients approval ? kindly clarify

    [Reply]

    

    Samer Skaik Reply:
    September 27th, 2009 at 8:53 am

    Hi Vijay
    I refer you to clause 2.1 which clarifies this matter:
    ———
    2.1 Engineer’s Duties and Authority

    (a) The Engineer shall carry out the duties specified in the Contract.

    (b) The Engineer may exercise the authority specified in or necessarily to be implied from the Contract, provided, however, that if the Engineer is required, under the terms of his appointment by the Employer, to obtain the specific approval of the Employer before exercising any such authority, particulars of such requirements shall be set out in Part II of these Conditions. Provided further that any requisite approval shall be deemed to have been given by the Employer for any such authority exercised by the Engineer.

    (c) Except as expressly stated in the Contract, the Engineer shall have no authority to relieve the Contractor of any of his obligations under the Contract.
    —–

    You need to refer to the particular conditions to examine if the authority of giving instructions or decisions to the contractor is subject to Employer approval or not. Anyway, the contractor is contractually not obliged to investigate on this issue if he receive an an instruction to vary the work for example. The Engineer would rather be well aware of his obligations and nature of authority under the contract.

    Regards,

    Samer Skaik

    [Reply]

30. vijay chhatwal Says:
    September 27th, 2009 at 8:39 pm

    thanks samer
    i’m bit new to FIDIC conditions, i think i’d better go through the red book first and see if my doubts are cleared.
    well anyways thanks for your guidence
    regards

    vijay

    [Reply]

31. vijay chhatwal Says:
    September 27th, 2009 at 8:51 pm

    hi sameer
    if ou can help me with one problem…..
    if your company has bagged a project contract, what will the organization structure for contract administration , with function and authorities of each one who will be involved in contract administration?and what will be the methods/techniques that will be used/applied for contract administration and monitoring??
    please if you can explain or any link where i could find the solution…

    regards
    vijay

    [Reply]

    

    Samer Skaik Reply:
    September 30th, 2009 at 5:06 pm

    Dear Vijay,
    You can search the web for the duties of contract manager and his suboordinates such as quantity surveyors and commercial managers.
    Regarding contract administration issues, you need to have training to develop your knowledge. for example, I have attended a comprehensevie course since two years that covered the main subjects which were as follows:

    1 Variations and Valuation of “varied work” under FIDIC and similar Forms of Contract. (If there are no Variations, then the administration of a contract is straight forward, but almost all projects are burdened with Variations and if the Contract Administrator is not fully competent in dealing with Variations, then there would be disastrous results. This session provides an exhaustive teaching on everything there is to know about Variations and their valuations).
    2 Provisions in the Contract for Extension of Time and Prolongation Costs. (Delayed project completion has become quite common in the industry. It is the duty of the Contract Administrator to deal with Extension of Time and Prolongation Cost Claims. If he is not fully aware about the entitlements of the parties and how to administrate them, then disputes are unavoidable. This session teaches in detail, on how to identify the entitlements to extension of time and prolongation costs even when such entitlements are not stated in a contract).
    3 Dealing with Concurrent Delays. (It is quite common for a Contractor to have slow progress during the early stages which he can recover during later stages. But at a time when he is late, if the Employer also delayed completion. In such concurrent delay situations, the Contract Administrator should be fully competent in identifying the entitlements of the parties, as the Contracts are usually silent on how to deal with concurrent delays).
    4 Notices, Detailed Particulars and Calculation of Prolongation Costs. (It is not always that a Contractor loses his rights if a notice or detailed particulars are not submitted within the time period stated in the Contract. Therefore, the Contract Administrator should be able to identify the circumstances under which the Contractor would lose its rights. This session also explains the details that should be present in a claim in order to prove the entitlements to Extension of Time and/or Prolongation Costs).
    5 Under-Recoveries and Over-Recoveries under Sub-Clause 52.3. (Under a JCT Form of Contract, the Employers and Consultants always deduct the Contractor’s Overheads priced within the Variations against the Overheads Claimed within Prolongation Costs, where EOT is given for delays due to such Variations, but under FIDIC Form of Contract it is incorrect to make such adjustment. Also if the Effective Final Account is well above the Effective Contract Price, the Contract Administrator should know how to adjust the over-recoveries in favor of the Employer and vice versa.
    6 Use of Formulae for Recover of Overheads (Hudson, Emden, Eichleay, Hank-Laan and Samaratunga). (Often the largest portion of a Prolongation Cost Claim is the Contractor’s Head Office Overheads cost element. The Contract Administrator should be fully aware of what Head Office Overheads are, which parts of such overheads can be claimed, which parts cannot be claimed and most importantly how such overheads could be appointed to the delay period of a project. They should also know why formulae such as Hudson and Emden cannot be used when dealing with a FIDIC Form of Contract).
    7 How to Draft a Contract Agreement. (Without knowing what a contract is, it cannot be administrated. This session explains what a legally binding contract is and provides knowledge on the essential provisions one should draft into a contract. Also deals with drafting Subcontracts. Should the limit of Subcontract penalties be 10% of Subcontract Price of 10% of Contract Price?).
    8 Measurement Principles and CESMM3. (Increasingly CESSM3 is being used to measure Civil Engineering work in Dubai and around the world. Since POW(I) is the more common Standard Method of Measurement, Contract Administrators need to be introduced to CESSM3).
    9 Arbitration and Other Dispute Resolution Techniques. (Before the parties become eligible to refer their disputes to arbitration, their Contract Administrators should follow many procedures in resolving any issues at lower tiers. Contract Administrators should be fully knowledgeable on the multi-tiered dispute resolution process written in contracts. In addition to providing them with such knowledge, this session also explains the step by step arbitration process including a video clip of an arbitration hearing. Also an introduction to Mediation, Conciliation and ADR).
    10 Sound Contract Administration. (How to protect the interests of the Company and its Clients, The What, Who, When and Why of Contract Administration. Also presents The DO’s, the DON’Ts and a code of conduct/ethics for Contract Administrators).

    Regards..

    [Reply]

    

    Abdul Reply:
    March 14th, 2010 at 4:04 pm

    Dear Mr. Samer,

    I’m quite interested in the referred training. Thus, I hereby request you to provide me the contact details to enhance/develop my knowledge and skills.

    Thanks for your kind cooperation.

    Regards,

    [Reply]

32. abbaslou Says:
    September 28th, 2009 at 2:32 pm

    Hi Dear manager…I’m one of the member of rastar process company in iran wich acting in municipality HSE…I wanna to know how can i get a soft copy of your new HSE plan for municipality…many thank in regards…
    saba abbaslou
    HSE HEAD OFFICE
    This is my cooperate e-mail adress…
    s.abbaslou@rastarco.com

    [Reply]

    

    Samer Skaik Reply:
    September 30th, 2009 at 4:58 pm

    Hi Abbaslou,
    You need to approach Dubai Municipality directly. I think that hard copy of HSE is available only costing 100 Dhs.

    [Reply]

33. Carlos Says:
    October 7th, 2009 at 10:19 pm

    Would you be so kind to please let me know; under FIDIC 1999 Red book:

    1- in a Lump sum Contract is the Employer entitled to make negative variations for items not required?

    2- can this type of contract be considered as design and build?

    3- what is the weight of the clause 2.4 Employers Financial Arrangements,(the employer provided a document for this, but it was wrongly worded, the Contractor requested the Employer to correct the document and to resubmit it to the Contractor but this never happen and the project is about to be completed, with some delays which could probably trigger LD’s, Question, this requirement was issued as a commercial clarification as a condition to be meet in order to establish the Commencement date for the Works,(these commercial clarification supersede all other documents in the Contract)can this be used to cancel Liquidated Damages because this condition was never satisfied, therfore the commencement date for the works can not be stablished (comencement date still at large), although the schedule marks the commencement of the Works?

    4- Can the Employer interfere with the works with the excuse that we will not be able to finish on time and start doing some of the works themselves and intruding, disturbing and interfering with the works of the Contractor? Does the Emplyer has the right to do this? ( I can not see anything related in the Contract.

    and finally can you please advise if the Employer and the Employer’s representative (not the Engineer) can be the same company? (the Employer created a Company and designated themselfs as Representative of the Employer),(there ia an engineer and an Architec designated by the Employer, so basically the Employer’s representative which is another company is managing the project on behalf of the Employer which is also managing the project, is this a valid structure?

    I am sorry if I am abusing your kindess but I can see that your knowlege is very valuable

    will appreciate very much your prompt and kind response

    Thank you
    Carlos

    [Reply]

    

    Samer Skaik Reply:
    October 8th, 2009 at 8:31 am

    Dear Carlos,
    Regarding your query, i would answer in the same order as follows:
    1- In lump sum contracts, Client has the right to omit any work which is indicated on drawings or specifications, or any other document except BOQ, since BOQ in LumpSum contracts is a valid document for rate reference only.
    However, Client doesn’t have the right to omit the work in order to carry it out by him self or by others .
    2- All Fidic forms of contract are re-measured contracts. making it lump sum is through the part II of special conditions of contract. Design and Build contract is known as silver book which is different than FIDIC 1999 Red book.

    3- You need to know that the contract should be always established in good faith. i understood that you have requested the client to submit evidence of his financial standing and he didn’t. In this case, he is in material breach to contract and you have the right to terminate and claim for all damages. However, it is not appropriate nor reasonable to build the case the way you mentioned, as the contractual commencement date was established as mentioned in appendix to tender, unless noted otherwise.

    4- Contract may be silent about this because it is obviously illegal since the property under construction belongs to Contractor only. Client can’t jump in simply to take over the work from the contractor for any reason. Alterntaively, this can be done through mutual agreement or termination of contract under clause 15.2 following contractual procedures.

    5- Client representative should be named in the contract. I don’t see any issue in having the representative inhouse since he should work for the Client interest and is not supposed to be impartial party as the Engineer.

    Thanks and Regards..
    Samer Skaik

    [Reply]

34. Carlos Says:
    October 8th, 2009 at 3:39 pm

    Dear Samer,

    Thank you so much for your response it will help me big time,

    there is just one last thing, would you please expand a little more regarding Item # 3 as to what is the actual weight of this clause as it is a new thing on the FIDIC 1999 version, is it valid?
    can be used in an arbitration as a cause for the commencement date being at large because the Employer failure to comply ?

    your response will be greatly appreciated.

    Carlos.

    [Reply]

    

    Samer Skaik Reply:
    October 10th, 2009 at 10:44 am

    Dear Carols,
    This is a new provision in Fidic form of contract which aims to protect the Contractor from Employer default in payment and bankruptcy as well. Adopting the clause in your claim seems irrelevant since there was no early notice from your end to the client regarding any action you are going to take due to his failure to fulfill his obligations.

    [Reply]

35. Samia Abuzarifa Says:
    October 15th, 2009 at 10:19 am

    We are the Main Contractor. The Employer has a Project Management Company and a Consulting Company.

    An email from the Project Management with copy to the Consulting
    Company has been sent to us asking us to purchase materials which are not included in our original BOQ. Could this email be considered as official instruction?

    [Reply]

    

    Construction Management Guide Reply:
    October 15th, 2009 at 11:37 am

    Hi Samia,
    Email is not an official or contractual document unless it is stated in the contract. You can consider this as a verbal instruction and confirm the same by CVI as per clause 2.5 of FIDIC 1987. Doing this will keep your good relations and will not compromise your rights.

    Regards..

    Samer Skaik

    [Reply]

36. andrew matambo Says:
    October 19th, 2009 at 4:52 pm

    What does the JCT Form of contract stipulate on the Quantity surveyor or Architect who fails to certify a certificate in time or fails to inspect the defects when the contractor has already corrected them?

    [Reply]

    

    Construction Management Guide Reply:
    October 22nd, 2009 at 8:23 am

    Hi Andrew, I have skimmed JCT 05 to check. the contract is silent about specific timeline for the architect to certify or give determination. however, legally speaking, there is an implied term in the contract that it should be based on good faith, which save both parties of the contract. Accordingly, you have the right to claim against any damage caused by unreasonable delay of the architect to certify works.

    Regards,

    Samer Skaik

    [Reply]

37. royal Says:
    October 21st, 2009 at 9:43 pm

    Can you give some information about prolongation cost calculation?

    Specifically,
    What can prolongation costs include
    How to Calculate Prolongation Costs
    And how to incorporate inflationary effect in prolongation cost calculation? (Allowance for inflation)

    [Reply]

    

    Construction Management Guide Reply:
    October 22nd, 2009 at 8:56 am

    Hi Royal,
    Prolongation cost is an entitlement of the contractor to be compensated against the granted extension of time depending on the cause of the delay. It can be claimed using clause 53.1 of Fidic 1987. It includes all costs and expenses that were incurred by the contractor and his supply chain vendors as a direct or indirect result of the delay.
    contractor can mainly claim site and head office overheads and subcontractors’ claims.
    Calculating site overheads must be as per actual losses and expenses while calculation of head office overheads is done by using one of the famous formulas such as Hudson’ formula or Emden’ formula.

    On the other hand, allowing for inflation in prolongation cost is never easy. You need to prove that you incurred or likely to incur losses as a result of material inflation due to project delay.

    Regards,
    Samer Skaik

    [Reply]

38. Javaid Says:
    October 31st, 2009 at 1:31 am

    I want to ask a question regarding ICE conditions of Contract 5th Edition .

    The contractor put construction period in the tender as 18 weeks. He submitted the programme in accordance with clause 14 of the conditions of Contract for 18 weeks. Later on he submitted the programme indicating 10 weeks. The project could not be completed in 10 weeks and delayed by 5 weeks. Although the project is completed within the original contract period of 18 weeks, the contractor is claiming delay of 5 weeks as the programme showing completion period of 10 weeks was approved by us.

    [Reply]

    

    Construction Management Guide Reply:
    October 31st, 2009 at 11:51 am

    Hi Javaid,
    You need to look into the contract documents to verify the contractual date for completion. Usually, the contractor is submitting his base line programme for the consent of the Engineer based on the contractual commencement and completion dates stated in the contract.

    Please advise on this to give you an accurate answer.

    [Reply]

    

    Javaid Reply:
    October 31st, 2009 at 6:45 pm

    Samer,

    There is no contractual date of completion but the contract period in the Form of Tender is 18 weeks. The project was started on July 20, 2009 and the completion date as per contract period of 18 weeks comes to be 20th November 2009. But contractor submitted programme indicating completion date of 24th September 2009 with contract duration of only 10 week. The contractor could not complete the project on 24th September 2009 and submitted a revised programme with completion date of 24th October 2009. The contractor is claiming for delay of 5 weeks although project is completed within a contract period of 18 weeks. As the contractor submitted a reduced unrealistic programme for completion of project, can he claim for delay when the project is completed within the contract period but delayed from his programme. In my opinion, the contractor is entitled to claim delay costs only when project is delayed from the contract period and once the calim for time extention is accepted.

    You opinion in this matter is requested.

    [Reply]

    

    Construction Management Guide Reply:
    November 1st, 2009 at 8:31 am

    Hello Javaid,
    Considering that there was no delay from the Employer’s end, it is obvious that the Contractor has taken a decision to accelerate the work without prior acceptance from the employer. Accordingly, his claim is irrelevant and has no solid basis.

    regards..

    Samer Skaik

    [Reply]

39. MG Says:
    October 31st, 2009 at 4:46 pm

    Is escalation clause exists in FIDIC?

    [Reply]

    

    Construction Management Guide Reply:
    November 1st, 2009 at 8:20 am

    Yes, it is there. Refer to clause 70.1 of Fidic 1987:

    70.1 Increase or Decrease of Cost

    There shall be added to or deducted from the Contract Price such sums in respect of rise or fall in the cost of labour and/or materials or any other matters affecting the cost of the execution of the works as may be determined in accordance with Part II of these Conditions.

    [Reply]

    

    MG Reply:
    November 1st, 2009 at 11:55 am

    What about FIDIC 99?

    [Reply]

    

    Construction Management Guide Reply:
    November 1st, 2009 at 2:37 pm

    Escalation clause is also available in FIDIC 1999. Refer to clause 13.8

    [Reply]

40. Javaid Says:
    November 1st, 2009 at 3:04 pm

    Samer,

    Regarding the contract I was discussing, there was a week’s delay from our side for making amendments in the drawings for one of the tasks but that task was not even on the critical path. As the contract was completed within the contract period, is the contractor entiltled for claiming delay for that week?

    [Reply]

    

    Construction Management Guide Reply:
    November 1st, 2009 at 4:13 pm

    Dear Javaid,
    there is misconcpetion here. according to the given detail, there is a total float of 8 weeks. This is because the proposed date for completion of the contractor is 8 weeks earlier than the date for completion as calculated from the contract. This means, the critical path doesn’t mean any thing when analyzing the delay. The situation is quite difficult to analyse the concurrent delay because no body has taken the right step of submitting a programme reflecting the contract.

    [Reply]

41. Jeremiah kok Says:
    November 8th, 2009 at 6:07 am

    Are we fully responsible for our nomonated sub-contractor (NSC) as if they are our sub-contractor, over the issues like their performance, quality of work, progress of work and etc?

    [Reply]

    

    Construction Management Guide Reply:
    November 9th, 2009 at 10:40 pm

    Hello Jeremiah,
    The Contractor is responsible of all his domestic and nominated subcontractors. However, FIDIC gives the Contractor the right to reject the nomination of subcontractors by presenting reasonable justifications of such rejection such as previous experience with this NSC or poor qualifications.

    Regards..

    Samer Skaik

    [Reply]

42. Adel94 Says:
    November 15th, 2009 at 1:06 pm

    Good Morning,

    During the bid prepration we get an agreement with the cleint to have a materail esclation clause of 5 % per year which was minuted in minutes of calrification meetings. After three months from the original award the cleint issue revised LOA with no materail esclation. The contract is fixed re-measured unit rate.
    - Is this a breach of contract by the cleint?
    - Are we in title for compensation due to increase in materil cost?

    regards,

    Adel

    [Reply]

    

    Construction Management Guide Reply:
    November 15th, 2009 at 1:38 pm

    Dear Adel,
    To give you precise answer, can you elaborate on the tendering stages you passed thru. I need answers to question such as: Have you received letter of award based on your bid? Was it conditional? post tender clarifications was part of the contract? etc..

    [Reply]

43. Adel94 Says:
    November 15th, 2009 at 2:15 pm

    Here are the answer to your questions:
    - During the bid, many clarifications were settled and minuted and become part of the assumption and later the contract.
    - Yes, The first LOA was based on the tender without any conditions.
    - Yes, tender clarification was part of the contract as attachement.

    [Reply]

    

    Construction Management Guide Reply:
    November 16th, 2009 at 10:48 am

    Thanks Adel,
    It seems that the employer wants to avail the credit crunch to deviate from his obligations under the valid original contract. If you don’t accept/sign the revised LOA, the original one will be binding to both parties and any deviation from the conditions therein will be considered a breach of contract.

    I recommend to go for negotatiation with the employer to prevent any potential dispute as a result of your objection to vary the contract conditions. However, if the original contract is terminated for employer’s convenience, you will be entitled for compensation of all damages and losses including your profit.

    [Reply]

44. Adel94 Says:
    November 17th, 2009 at 10:16 am

    Thanks Mr. Samar,

    In case my management (Under pressre from cleint if you did not accpet, the contract will be terminated) signed the revised LOA, is this consdier as accpeteance to waive the materail esclation caluse.
    Presenting this in offical claim will be good to overcome this issue becuase the loses we get more than SR 6,500,000.

    regards,

    Adel

    [Reply]

    

    Construction Management Guide Reply:
    November 17th, 2009 at 11:01 am

    In this case, it is better to negotiate with the Client and agree on an express term in the LOA to get paid for the losses incurred up to the date of the revised LOA. If the LOA is already signed without this clause, you are still entitled to recover the incurred costs prior to signing. You need to know that any addendum to contract will overrule and supersede any previous term or condition in your original contract.

    Any way, issuing revised LOA is not a professional approach in my opinion, as it should be under a proper form of addendum to the contract.

    Regards,,

    Samer Skaik

    [Reply]

45. kenwyn Says:
    November 18th, 2009 at 12:33 am

    Hi

    Please provide a response to the following scenario:

    Prior to and even after the commencement of a project, references were made by the Contractor to the Client regarding rate increases for concrete, steel and formwork, unbeknown to the Consulting Engineer. There is no correspondence about the matter in any pre-construction or site meetings, but there is written evidence to show that the matter was referred to the Client by the Contractor. However, there is no record of any response from the Client, and now that the job is completed, the Consulting Engineer is refuting the claim for payment of the additional cost. What form of redress does the Contractor have, if any and what do you propose be done in the circumstance?

    Kenwyn

    [Reply]

    

    Construction Management Guide Reply:
    November 18th, 2009 at 2:20 pm

    Hello Kenwyn,
    You firstly need to examine the contract documents if the escalation clause is there or not. For instance, if you use FIDIC 1987/1992, you have clause 70.1 but usually this clause is amended by particular conditions.
    Now, serving the proper claim notice is very important for the soundness of your claim. i am unaware of the nature of the written evidence you talk about, but it should mention that event and the intention to claim. Contractually, your case will be little weakened if no notice is served, but legally you should get compensation on the actual losses.

    I wish you could elaborate more on your contract detail to serve you better.

    Regards..

    Samer

    [Reply]

46. kenwyn Says:
    November 18th, 2009 at 11:13 pm

    Hi Samer,

    I reviewed the signed contract and realised that FIDIC 1999 was used in the preparation of the General Conditions of Contract section, and that FIDIC 1987 was used in the preparation of the section for the Particular Conditions. In the latter case, clause 70.1, which you had referred to and deals with cost escalation, was deleted and replaced with one specifying the type of contract ( fixed price in this case). Now, is it the correct practice to use both forms of FIDIC (1999 & 1987)in the same contract? Is this conflicting even if the contract was mutually agreed to and signed?

    In the Contractor’s claim to the Client, the following statement was made in a letter: “Further to our discussion concerning the signing of the contract and the price increases in mainly concrete, reinforcing steel, blocks and formwork. The increased cost will be submitted to the Consultants (name of company)for their review and approval prior to submitting our invoices for payment”. Does this constitute a proper claim notice? If not, then what should be the next step?

    You also mentioned that legally the Contractor should get compensation on the actual losses. How is this possible?

    Thanks

    Kenwyn

    [Reply]

    

    Construction Management Guide Reply:
    November 22nd, 2009 at 8:47 am

    Hello Kenwyn,
    General conditions of contract usually refer to a single standard form of contract while particular conditions could be a bespoke one. it will not harm if the employer refer to FIDIC 1987 in particular clauses taking into consideration that no conflict will occur. Anyway, contract is prioritizing particular conditions in case of such conflicts.

    Regarding the notice, it should be served within 28 day from the occurrence of the event to be an appropriate notice.

    about the legal part, it depends on the civil code in each country. In UAE for example, the notice for claim is not a mandatory prerequisite to be entitled for compensation.

    Regards..

    Samer Skaik

    [Reply]

47. Adel94 Says:
    November 21st, 2009 at 2:18 pm

    Daer Mr. Samer,

    I unit rate subcontract agreement, the computation of estimated final price was subjected to 20 % discount while this discount was not reflected to the unit rate on the attachement.
    My subcontractor is now claiming for the original price and did not consider the discount becuase the unit rate on the attachement was not reflected after the discount was agreed. He is refereing back to the cluase of the agreement which is stating” the final price shall be determined by multiplying the rates stipulated in the attachement”.

    Now, is the discount is applicable to the unit rate where this agreement is unit rate remeasured.

    regards,

    Adel

    [Reply]

    

    Construction Management Guide Reply:
    November 22nd, 2009 at 8:51 am

    Dear Adel,
    It should be applicable for the original scope only. any variation work shall be dealt separately.

    Regards.

    Samer Skaik

    [Reply]

48. Baig Says:
    November 22nd, 2009 at 8:14 am

    How can a contractor substantiate their claim for “Loss of Profit” in case where Employer terminate contractor’s employment or delete big portion of works.

    [Reply]

    

    Construction Management Guide Reply:
    November 22nd, 2009 at 9:02 am

    Dear Baig,
    It really depends on the actual case. You presented two cases here. In FIDIC forms of contract, if contract is terminated for employer’s convenience, you can claim for loss of opportunity which includes loss of profit. Refer to this link for more details:
    http://cmguide.org/archives/1438

    If Employer permanently deletes big portion amounting to 15% of the total scope, then readjustment to head office overhead shall be done. Refer to clause 52.3 for details.

    Regards..

    Samer Skaik

    [Reply]

49. Adel94 Says:
    November 22nd, 2009 at 9:33 am

    Dear Mr. Samer,

    If the unit rate is firm and not subjected to esclation or adjustment price during the project duration, still any varation should be dealt separatley or the same unit rate will be applicable?!

    regards,

    Adel

    [Reply]

    

    Construction Management Guide Reply:
    November 22nd, 2009 at 10:04 am

    Dear Adel,
    the rate should be reasonable and applicable to be used for any variation work. Engineer is the party who could determine this and fix the rate accordingly. i have answered a similar question here before. Please refer to it.

    Samer

    [Reply]

50. kenwyn Says:
    November 24th, 2009 at 12:02 am

    Hi Samer,

    Thanks for the information posted. I’ll be in touch.

    Best regards

    Kenwyn

    [Reply]

51. Sam Says:
    November 29th, 2009 at 2:49 pm

    if a Joint venture of a construction contract is embroiled in internal problems, will the owner have the right to terminate until a joint resolution of the JV partner is resubmitted to confirm the way forward?

    [Reply]

    

    Construction Management Guide Reply:
    November 29th, 2009 at 7:24 pm

    Dear Sam,
    If such problems developed in a way that the JV contractor will not fulfill his obligations as stated in the contract and will be in default, then the Employer have the right to terminate the employment.

    Regards.

    Samer

    [Reply]

52. Adel94 Says:
    December 9th, 2009 at 1:45 pm

    Daer Mr. Samer,

    We get a new contract awarded to excuate Co-gen plant, but there is a clause with high risk. I need your profissional advice to accomdate scuh clause during the construction.
    The clause state:
    - “The contractor has no right to claim if The Engineer fails to perform or meet any of its obligations”.
    -”The engineer can effectivly alter the contracotr’s scheduled milestone and/or completion dates and the contracotr will not be entitled to claim additional costs”.

    [Reply]

    

    Construction Management Guide Reply:
    December 9th, 2009 at 4:18 pm

    Dear Adel,
    I wonder how you signed a contract including this clause. Anyway, you should have assessed all risks involved and mitigated the same by mainly allowing for maximum LD’s cost and appropriate prolongation cost in your offer.

    If this didn’t happen, then you need to be very diplomatic and keep a friendly relationship always with with the Engineer to try to protect your rights.

    Regards..

    [Reply]

53. MOHAMMED Says:
    December 12th, 2009 at 10:17 am

    Dear sir,

    A Project awarded with Traditional procurement, measure & pay contract (under Fidic 1987) with a contract period of six months.

    The issue is employer doesnot get local authority approvals which is under employer’s scope.

    Contractor’s expected work done per month cannt be achieved. So contractor running with under recovering of overheads due to lower value of work done.

    What would be the claim head here? and what would be the basis? & procedure??

    [Reply]

    

    Construction Management Guide Reply:
    December 13th, 2009 at 12:28 am

    Dear Mohammad,
    You need to follow the contractual procedure of building the claim case as follows:

    1- Send a notice of delay within 28 days from the occurance of the delay as per clause 44.2, bearing in mind that your entitlement to claim is secured pursuant to clause 44.1 e.
    2- Submit interim/detailed particulars of the claim within 28 days or as agreed by the Engineer. Refer to a relevent article on how to prepare the claim here:
    http://cmguide.org/archives/28

    On the other hand, you need to calculate the prolongation cost which includes all losses and damages incurred due to such delay such as site overheads, headoffice overheads, subcontractors claims, etc…
    Refer to CMGUIDE articles and downloads to
    learn how to calculate the cost.

    Regards..

    Samer Skaik

    [Reply]

    

    MOHAMMED Reply:
    December 13th, 2009 at 7:25 am

    Dear samer,

    Thanks for your swift reply
    Yet i have another followup question?
    Let me put in this way,
    Same above scenario but the contract is under FIDIC 99 yellow book (plant, design and build)
    What would be the claim head? and what would be the basis??
    (If i am right , i can follow same claim procedure)

    [Reply]

    

    Construction Management Guide Reply:
    December 13th, 2009 at 8:20 pm

    Dear Mohammad,
    FIDIC forms of contracts usually have the same claim procedure.

    [Reply]

54. Hatim Says:
    December 21st, 2009 at 1:41 pm

    We are MEP S/C. our S/C agreement is based on FIDIC 1987/1992 both conditions of Contract and Subcontract for works of Civil Engg. construction.WE have been going thru very non-payment issues with the M/C for the last 7 months. We waved “Suspension or delaying works” clause 69.4 with notice period of 28 days but notice period is over and no payment done.
    my question: what is next?
    the M/C is forcing us on a new suplimentary agreement on which to complete the remaining scope of works in stages and without payment certificate but payment based on stage completion i.e if the each stage is completed on the time , we are paid. If not penalty is imposed….tell me what to do?? Thanks

    [Reply]

    

    Construction Management Guide Reply:
    December 22nd, 2009 at 7:44 am

    Hello Hatim,
    This is a repeating situation in the market due to credit crunch. Your decision here depends on your company strategy. You can terminate the contract as per clause 69.1, keep the work suspended or reduce the rate of progress. Your claim for damages will be strong if it is backed up with proper substantiation and records.

    Otherwise, you have the friendly negotiation route to apply win to win approach with your Employer.

    Anyway, the Employer can’t force you to alter the contract.

    Regards.

    Samer Skaik

    [Reply]

55. Manish Says:
    December 23rd, 2009 at 9:59 am

    Who owns the float in the project???

    [Reply]

    

    Construction Management Guide Reply:
    December 26th, 2009 at 8:54 pm

    Dear Manish,
    This is a very debatable subject. Usually, the standard forms of contracts don’t mention this critical issue, while I strongly recommend so since many disputes pertaining the delay analysis of EOT claim depends on the ownership of the float. I refer you to an article in CMGUIDE which covers your query:
    http://cmguide.org/archives/37

    Regards..

    Samer Skaik

    [Reply]

56. masood Says:
    December 23rd, 2009 at 1:57 pm

    when we started contract the tax was 3% and now the tax is 6% ,can we claim it as per clause 70.2 of coc 1987

    [Reply]

    

    Construction Management Guide Reply:
    December 26th, 2009 at 8:57 pm

    Dear Masood,
    Yes you can claim provided that such issue was not known to you 14 days prior to submit your tender.
    You need also to check your particular conditions of contract as this clause is usually altered by the Employers to avoid the involved risk.

    Regards.

    Samer Skaik

    [Reply]

57. liaqat hayat Says:
    December 28th, 2009 at 9:08 am

    Hi,
    I have following questions on subject clauses.
    1) Why there is different rate of calculating liquidated damages under
    clause 47.1 &47.2 ?
    2)If there is a instructed varied work containing items where existing boq
    rates in the contract are applicable,is it still necessary to prepare a
    variation order on occurance or leave it to substancial completion stage
    when anyway overall increase/decrease shall be reviewed under clause 52.3
    I shall be obliged for clarification
    Regards
    Liaqat Hayat

    [Reply]

    

    Construction Management Guide Reply:
    December 29th, 2009 at 3:16 pm

    Dear Liaqat,

    I list below my answer in the same order:

    1) I am unable to understand this question. Do you mean the reasons beyond the reduction in LDs?

    2)You are not obliged to submit the assessment of such instructed variation within a specific timeline.

    3) Adjustment of overheads as per clause 52.3 is done at the last stage of the final account (after taking over) where all information about remeasured quantities and variations is available. In practice, the assessment is conducted during DLP but this is not binding since the contract is silent about it.

    Waiting for your clarification on (1).

    Regards..

    Samer Skaik

    [Reply]

58. liaqat hayat Says:
    December 29th, 2009 at 7:52 pm

    Dear Samer,
    While thanking you for your prompt response,I re-phrase my questions for clarity.
    1)The LDS under clause 47.1 is say 0.1%per day of contract value(i.e.total value of original work)whereas under clause 47.2, it is 0.1%per day of remainder contract value( balance work)of the sections/parts.If my understanding correct?If so,why two different principles adopted under the two clauses to calculate liquidated damages here.It appear to be inequitable.
    2)My specific question is can I postpone the submission of a VO till toc issuance if varied work contain items already available in the contract BOQ?I am adviced that VO must be submitted on occurance now.I am looking for second opinion.
    3)Again under clause 47.1,I need clarity the date from which LDS are to be deducted?My understanding is from date of TOC issuance date only even if these are leviable much before this due to contractual completion date having passed and time not extended.
    I shall be grateful for your detailed comments.
    Regards-Liaqat Hayat

    [Reply]

    

    Construction Management Guide Reply:
    December 30th, 2009 at 9:24 am

    Dear Liaqat,

    1) The Employer is the party who decides on the nature of liquidated damages prior to tendering and the contractor should considers the risks involved. Anyway, I quote the following statement from FIDIC Guide to clarify the issue:

    “If delay in completion does not affect the whole of the Works, arrangements for a pro-rata reduction are set out in Sub-Clause 47.2. If it is considered by the Employer that a pro-rata reduction would not be equitable, alternative provisions should be included in Part II.”

    2) This is only applicable for claims made pursuant to clause 53.1.

    3) The Employer may deduct the amount of liquidated damages from any monies due or to become due to the Contractor. This may be conducted by the Engineer when the contractor submits his interim/final payment application after the passing of TOC in light of the actual days of delay.

    Regards..

    [Reply]

59. Chandan Kamat Says:
    December 30th, 2009 at 1:02 pm

    Dear Samer,
    I sincerely appreciate the value you are adding to construction practice specially in middle east.
    My query is regarding the Prime cost items included in the fixed priced lump sum contracts.
    What particular conditions can be added to the General conditions of contract (State of Qatar)to minimize the conflicts at latter stage related to final account of PC items in case of variances in prime cost and quantities of the item mentioned in BOQ.(Preferably from employers perspective.)
    Regards,
    Chandan Kamat.

    [Reply]

    

    Construction Management Guide Reply:
    December 30th, 2009 at 2:24 pm

    Dear Chandan,
    Thank you for your impression about CMGUIDE.

    The best thing to deal with PC items without conflict is to agree on the following methodology of adjusting PC items:

    1- State a formula for the adjustment of PC items which is simply as follows:

    ((Supplier rate-PC rate) X Actual Qty) + OH + P

    2- The percentage for spare parts and wastage to be considered. For example, a particular percentage for them can be clearly stated in the contract and included in the PC rate and the supplier to include the same in his rate or easy calculation.

    3- Contractor Overheads and profit to be agreed and stated as part of the contract.

    Hint: for tiles, the pattern and size have a direct impact on supply and fixing rate which should be considered by the contract administrator case to case.

    Thanks and regards.

    Samer Skaik

    [Reply]

    

    Chandan Kamat Reply:
    December 30th, 2009 at 7:10 pm

    Dear Samer,
    Appreciate your reply. I was refering to more complecated scenario for example
    Cost of fixing the ceramic tiles PC rate 40/m2, quantity mentioned in the BOQ 100m2, rate quoted by contractor 100/m2 which includes PC rate 40/m2, labour,OH and profit.
    Now there can 4 different scenarios,
    1. actual rate more than pc rate (40/m2), actual quantity more than BOQ qty.
    2. Actual rate more than pc rate, actual quantity less than BOQ qty.
    3. Actual rate less than pc rate, actual quantity more than BOQ qty.
    4. Actual rate less than pc rate, actual quantity less than BOQ qty.
    In fixed lump sum contract where contractor are supposed to verify the BOQ quantities and in the event when contractor agrees to BOQ quantities which at latter stage change (increase or decrease) which quantities should we consider for final account.
    2.

    [Reply]

    

    Construction Management Guide Reply:
    December 31st, 2009 at 9:16 am

    Dear Chandan,
    If the PC rate varies from the one inserted in BOQ, the adjustment will be applicable as I explained above taking the actual quantities -Not BOQ quantity- into consideration.

    if the PC rate is the same, no adjustment is required to the contract regardless of any difference between BOQ Qty and actual qty since the contract is based on lump sum basis.

    Regards.

    [Reply]

60. masood Says:
    December 31st, 2009 at 9:51 am

    who appoint the engineer,is it necessary for employer to get the consent of contractor while appointing him.fidic1987

    [Reply]

    

    Construction Management Guide Reply:
    January 9th, 2010 at 8:57 am

    Dear Masood
    Liaqat response is good enough to answer your question.
    I quote it here for your reference:
    ——-
    liaqat hayat Says:
    January 2nd, 2010 at 4:47 pm edit
    Hi,
    The Engineer Is appointed by the Employer not necssarily with Contractor’ consent.There is an obligation on the part of Employer to ensure that the Engineer duly performs as he is appointed by him.
    Regards
    ——-

    Regards.

    Samer Skaik

    [Reply]

61. liaqat hayat Says:
    January 2nd, 2010 at 4:47 pm

    Hi,
    The Engineer Is appointed by the Employer not necssarily with Contractor’ consent.There is an obligation on the part of Employer to ensure that the Engineer duly performs as he is appointed by him.
    Regards

    [Reply]

    

    Construction Management Guide Reply:
    January 9th, 2010 at 8:58 am

    Dear Liaqat,

    Thanks for your valuable participation in CMguide.

    Samer

    [Reply]

62. Raj Says:
    January 3rd, 2010 at 6:25 pm

    what contractual clause can i use if a subcontractor quotes reasons for delay as “defective materials supplied by subcontractor’s vendor”

    [Reply]

    

    Construction Management Guide Reply:
    January 9th, 2010 at 9:05 am

    Dear Raj,
    The risk of defective material of the suppliers is solely borne by the subcontractor and there is no contractual nor legal ground to justify the delay.

    regards..

    Samer Skaik

    [Reply]

63. liaqat hayat Says:
    January 5th, 2010 at 5:57 pm

    Dear Samer,
    Do the contractor’s overheads include salaries of his site supervision staff like surveyor/inspector etc or has to be paid separately for non-BOQ items when agreeing a new rate.His overhead and profit is already fixed in the contract as 25%

    [Reply]

    

    Construction Management Guide Reply:
    January 9th, 2010 at 10:10 am

    Hi Liaqat,
    there are two types of overheads:
    1- Site overheads: this is Usually considered in the BOQ preliminaries

    2- Head office overhead: This is usually considered as a percentage included in the BOQ rate.

    You need to examine the term overhead in your contract and what it refers to.

    Anyway, generally speaking, if the preliminaries exist in BOQ in your case, you can’t claim since all staff salaries are included. If not, then it is usually understood that it is included in your 25% markup.

    Regards..

    Samer Skaik

    [Reply]

64. nishith_dubey Says:
    January 19th, 2010 at 4:03 pm

    can a contract be terminated directly under the UAE law (247 / 892) in spite of having provision of FIDIC conditions govering the contract in order to bypass lenghty process?

    [Reply]

    

    Samer H Skaik Reply:
    January 26th, 2010 at 9:58 pm

    Termination of contract can be done by mutual agreement or court order as per UAE civil code which overrules the contract.

    [Reply]

    

    nishith_dubey Reply:
    January 27th, 2010 at 10:11 am

    In this scenario, then what is the point of agreeing to the terms and conditions of Contract Agreement which has clearly defined procedure for all kinds’ of events and also governs the execution of Contract? Would this not dilute the sanctity of the signed / agreed Contract agreement? Would this also allow aggrieved party to circumvent the agreed contractual procedure in order to have early result? Please clarify. Thanks

    [Reply]

    

    Samer H Skaik Reply:
    January 29th, 2010 at 10:37 am

    Contract conditions must be legally valid. For example, you can’t have a contract for supplying materials from Israel even if the both parties have agreed and signed the contract because THE BOYCOTT is stated in the UAE law.

    [Reply]

65. Dilip Says:
    January 25th, 2010 at 12:18 am

    BOQ under CESMM3 , can Head office Overhead be adjusted in accordance with clause 52.3?

    Please advise

    [Reply]

    

    Samer H Skaik Reply:
    January 26th, 2010 at 10:00 pm

    Yes it can be adjusted as stated in clause 52.3 regardless of the method of measurement used.

    [Reply]

66. Mahmood Says:
    February 8th, 2010 at 9:53 am

    Dear Sir,

    i would like to ask about extension of time “Delay in Nomination” how would be determined straight from the baseline progamme without conisdering the Main contractor delay till the nomination. Is the Employer is bound to bring nominated contractor at site whether site is ready or not?

    Regards,
    Mahmood

    [Reply]

67. Samer H Skaik Says:
    February 16th, 2010 at 11:31 pm

    Dear Mahmoud,
    There are many methodologies for the delay analysis and it is not a straight forward exercise. I refer you to two articles published in CMGUIDE before about the delay analysis.

    However, in case of concurrent delays as it is obvious in your case, the SCL protocol -which is available in download library- will help you decide on your particular problem.

    Regards..

    Samer

    [Reply]

68. alex Says:
    February 28th, 2010 at 3:29 pm

    what will be my contractual basis if i am to make a cost and extension of time claim?

    [Reply]

    

    Samer H Skaik Reply:
    March 1st, 2010 at 8:03 am

    Dear Alex,
    It depends on the event that caused the claim.

    [Reply]

    

    jane Reply:
    March 3rd, 2010 at 12:12 pm

    The contractor has submitted their cost claim (preliminaries) for the EOT. The EOT was mostly due to variation order and was approved by the Owner.
    Does the contractor has the right for this claim as per the clause in FIDIC for Extension of Time?
    This clause mentions “the amount of such extension”. Does this pertain to the duration or cost or both?
    Regards…

    [Reply]

    

    Samer H Skaik Reply:
    March 5th, 2010 at 9:34 pm

    Dear Jane,
    If the volume of extra works can’t be done with the planned resources in the same time frame as shown in the baseline programme where the relevant activity on the critical path, then you have a solid basis for the claim pursuant to clause 44.1(a) if you use FIDIC 1987 or clause 8.4(a) of Fidic 1999.

    For example, if the quantity of steel reinforcement in the raft have been increased significantly due to any redesign, then you will not be able to complete fixing the steel in the same duration with the available resources. If you decide to get more resources than planned to crash the activity, then you should examine the acceleration cost if any.

    Regards,,

    [Reply]

69. alex Says:
    March 1st, 2010 at 1:39 pm

    the extension of time was approved due to many variation orders initiated by the client.

    am i eligible to make a claim for cost impact of the EOT and what contractual basis should i base it to? is the Clause 44.1 of FIDIC applicable?

    [Reply]

    

    Samer H Skaik Reply:
    March 5th, 2010 at 9:39 pm

    Hi Alex,
    Clause 44.1 entitles you for an extention of time only. For the prolongation cost associated with EOT claim, you need to base your claim of the additional payment on clause 53.1 and you shuold serve notice in this regard.

    [Reply]

    

    bernard Reply:
    April 16th, 2010 at 4:16 pm

    Dear Samer,

    If no notice has been given? Can we still claim for the prolongatio costs?

    [Reply]

    

    Samer H Skaik Reply:
    April 17th, 2010 at 2:25 pm

    Yes, you can if you follow FIDIC 1987.

    [Reply]

    

    bernard Reply:
    April 17th, 2010 at 7:42 pm

    It is not clear to me what do you mean by yes you can if you follow FIDIC 1987. What am I going to follow in FIDIC 1987. I have not following because we failed to give 28 days notice as required under Clause 53.1. Do I am still entitled for relief? In what basis? Because the Client is insisting that we have no notice so our claims is waive.

    [Reply]

    

    Samer H Skaik Reply:
    April 18th, 2010 at 9:30 am

    FIDIC 1987 doesn’t state that you will lose your rights if the notice is not served. It may weaken your case little bit, but you are still entitled legally. In Fidic 1999, clause 20.1 clearly states that you will lose your entitlement if the notice is not served.

70. Bo Ceballos Says:
    March 2nd, 2010 at 11:13 am

    Dear Sir,

    What are the attaching documents required of 100% work completion claim in both original & variation order? What is the practice in most company here in UAE for final settlement?
    Thank you and more power.

    Bo

    [Reply]

    

    Samer H Skaik Reply:
    March 5th, 2010 at 9:49 pm

    Dear Bo,
    Please refer to clause 60.5 and 60.6 which explain the contractual procedures for the final payment:

    60.5 Statement at Completion

    Not later than 84 days after the issue of the Taking-Over Certificate in respect of the whole of the Works, the Contractor shall submit to the Engineer six copies of a Statement at Completion with supporting documents showing in detail, in the form approved by the Engineer,

    (a) the final value of all work done in accordance with the Contract up to the date stated in such Taking-Over Certificate

    (b) any further sums which the Contractor considers to be due and

    (c) an estimate of amounts which the Contractor considers will become due to him under the Contract.

    The estimated amounts shall be shown separately in such Statement at Completion. The Engineer shall certify payment in accordance with Sub-Clause 60.2.

    60.6 Final Statement

    Not later than 56 days after the issue of the Defects Liability Certificate pursuant to Sub-Clause 62.1, the Contractor shall submit to the Engineer for consideration six copies of a draft final statement with supporting documents showing in detail, in the form approved by the Engineer,

    (a) the value of all work done in accordance with the Contract and

    (b) any further sums which the Contractor considers to be due to him under the Contract or otherwise.

    If the Engineer disagrees with or cannot verify any part of the draft final statement, the Contractor shall submit such further information as the Engineer may reasonably require and shall make such changes in the draft as may be agreed between them. The Contractor shall then prepare and submit to the Engineer the final statement as agreed (for the purposes of these Conditions referred to as the “Final Statement”).

    60.7 Discharge

    Upon submission of the Final Statement, the Contractor shall give to the Employer, with a copy to the Engineer, a written discharge confirming that the total of the Final Statement represents full and final settlement of all monies due to the Contractor arising out of or in respect of the Contract. Provided that such discharge shall become effective only after payment due under the Final Payment Certificate issued pursuant to Sub-Clause 60.8 has been made and the performance security referred to in Sub-Clause 10.1, if any, has been returned to the Contractor.

    60.8 Final Payment Certificate

    Within 28 days after receipt of the Final Statement, and the written discharge, the Engineer shall issue to the Employer (with a copy to the Contractor) a Final Payment Certificate stating

    (a) the amount which, in the opinion of the Engineer, is finally due under the Contract or otherwise, and

    (b) after giving credit to the Employer for all amounts previously paid by the Employer and for all sums to which the Employer is entitled, other than under Clause 47, the balance, if any, due from the Employer to the Contractor or from the Contractor to the Employer as the case may be.

    [Reply]

71. Emmanuel Amankwah Says:
    March 5th, 2010 at 1:39 am

    How do i use preliminaries in claiming for extension of time granted by the consultant engineer on a project?

    [Reply]

    

    Samer H Skaik Reply:
    March 5th, 2010 at 9:55 pm

    Dear Emmanuel,
    I guess you mean the prolongation cost calculations. The precise way is to calculate the actual cost which is not an easy job. Alternatively, you can calculate the preliminaries on a pro-rata basis.

    Regards..

    [Reply]

72. Nasair Says:
    March 5th, 2010 at 2:45 pm

    Hi

    I have a lump sum contract with PC rate and provisional sum ,the provisional sum is separated in the BOQ there is nothing in the contract how to deal with the PC rates items qauntitiy .
    all mentioned is that the conract is lumpsum and quantities is the contractor responsibilty.
    disputes between client and contractor happended due to unclear agrement done.
    kindly advice as per the information mentioned in the contract.do we have to deal with actual amount or BOQ amount for PC items

    Thank you

    [Reply]

    

    Samer H Skaik Reply:
    March 5th, 2010 at 9:59 pm

    Hi Nasair,
    I have answered some similar questions above, however, for PC rates adjustments, you have to consider the actual quantities from the contract drawings not the BOQ quantities.

    If the PC rate is as same as the actual cost of the material, then no adjustment to be made for the BOQ item regardless of the difference in quantities between BOQ and drawings.

    [Reply]

    

    Nasair Reply:
    March 6th, 2010 at 11:44 pm

    Hi Samer

    we have to consider the actual quantity even if the pc items are included with the lump sum items,it is not seperated like the provisional sum.
    some people says if it is seperated so you have to consider the actual amount and if it is included in the lump sum items so you have to consider the bill amount.

    kindlly advice

    Thank you

    [Reply]

    

    Samer H Skaik Reply:
    March 8th, 2010 at 4:56 pm

    Hi Nasair,

    Let me understand you clearly. Take an example: the PC item of ceramic tile is 10$ and it is included in the ceramic tile BOQ item for complete supply and install with total amount of 100$ for the item. BOQ relevant quantity is 5000 m2 while actual quantity is 10000 m2.

    If the actual cost of the material is 20$, then the adjustment will be as follows:

    (20-10)X(10000) X Markup%= $ 100,000 X markup% (To be added to the contract price)

    Here, you claim the difference in the material cost which you did not include in your lump sum price regardless the PC item is separate or included.

    Is it clear now?

    Regards..

    [Reply]

73. Keerthi Says:
    March 9th, 2010 at 4:28 pm

    Hi Samer

    My project is lumpsum Contract based on FIDIC 1987 4th edition reprinted on 1992. Preiority of documents are Drgs, Specs and BoQ. During agreement Contractor submitted his own BoQ ignoring Consultants BoQ.

    As per Site Instruction, there was changes in diameters and increase in length (by 34%) of a particular service. In this case we cannot identify and evaluate a change on apple to apple basis.

    Contractor submitted his Quantity measuring both Contract & Revised Drgs for additions and omissions. As a Consultant QS I measeured revised drgs. for additions and used BoQ quantity for omission.

    Kindly advise whose approach is correct (omission as per Contract Drg / BoQ qty) and which clause I can refer to justify my metod of evaluation.

    Thanks

    [Reply]

    

    Samer H Skaik Reply:
    March 11th, 2010 at 1:54 pm

    Dear Keerthi,

    Firstly,I have doubt about the priority of contract documents you are referring to since it is not stated in FIDIC 1992.

    Secondly, about your question, you must go for the actual quantities for addition or omission not the BOQ quantity. Usually, this approach is mentioned somewhere in the Preambles.

    Warm regards

    [Reply]

74. Abdul Hamid Says:
    March 10th, 2010 at 2:11 pm

    Is it Correct to reduce prelims running price relevant to a concern month, if the Contractor did not complied with the requiremnts of HSE.

    This is if an item is exist in the Prelims bill for HSE
    and as per FIDIC 87/92

    [Reply]

    

    Samer H Skaik Reply:
    March 11th, 2010 at 1:58 pm

    Dear Abdul Hamid,
    Contractually, you can issue Non conformance notice (NCR) to the contractor and deduct some money from the contractor if he fails to comply within a reasonable time. Refer to clause 39.2 to justify your entitlement.

    Regards

    [Reply]

75. Shamsusaman.S Says:
    March 13th, 2010 at 8:30 am

    Dear Samer,

    Further to your reply on Sep 30th 2009 to Vijay,
    Can you please elaborate about the course details and the insttitution from where can get the same.
    Eager for your reply
    Thanks & Best regards

    [Reply]

    

    Samer H Skaik Reply:
    March 15th, 2010 at 7:52 am

    Please contact Prof. Samaratunga. He is besed in Dubai. Email: sam99@eim.ae. there will be one course in abu dhabi soon.

    Regards

    [Reply]

76. Shamsusaman.S Says:
    March 13th, 2010 at 8:37 am

    Dear Samer,

    I have one more question.
    In a Lumpsum contract for the adjustment of PC rate when there is increase in the supplied rate than mentioned in the BOQ rate, does we ccan consider the actual quantity from the drawings which comes more than the BOQ quantity and there is neither changes in the drawings nor any instructions for changes.(The BOQ quantity is wrong)
    Thanks

    [Reply]

    

    Samer H Skaik Reply:
    March 15th, 2010 at 7:55 am

    If the PC rate changes, then you will have to calculate the difference in cost by the actual quantities. Forget about BOQ quantities in lump sum contracts.

    Regards,

    [Reply]

77. kenwyn Says:
    March 23rd, 2010 at 12:49 am

    Hi Samer,

    Can a Contractor, who has signed a lump sum contract to do restoration works to some buildings, several of which have been issued taking over certificates, claim for extension of time, even though there are outstanding works (not necessarily defects)to be completed during the defects liability period? If yes,what are the implications?

    [Reply]

    

    Samer H Skaik Reply:
    March 28th, 2010 at 10:56 am

    Hi Kenwyn,

    The contractor can claim for EOT if any event takes place from the list mentioned in clause 44.1 of FIDIC 1987.
    As a result, the contractor can claim prolongation costs if the EOT is valid.

    Regards..

    [Reply]

78. Ricardo N Says:
    March 27th, 2010 at 7:03 pm

    Is it an issue if the employer’s representative provide the designs of Variation Order Items or BOQ items requiring design changes under a design and construct contract which includes a BOQ

    [Reply]

    

    Samer H Skaik Reply:
    April 11th, 2010 at 9:11 am

    Hi Ricardo,
    Your question is not clear for me. May you elaborate further so I can help you better?

    [Reply]

    

    Ricardo N Reply:
    April 18th, 2010 at 6:47 am

    In other words do you envisage any potential problems if under a design and construct contract where some elements of design work has been done by the employer or the employer’s representative and a BOQ has been provided against which to bid for related items in the Bid Document but during the execution of the contract, variations are required and the employers representative does the designs instead of allowing the contractor to provide the designs for subsequent construction by the contractor in terms of the contractor’s liability for those designs

    [Reply]

    

    Samer H Skaik Reply:
    April 18th, 2010 at 9:46 am

    There is no provision in the design construct turnkey contract allowing the Employer to design. He can vary the contract by asking the contractor to submit a proposal based on his concept design.

    However, if the Employer insists on designing some variation works, he must indeminfy the contractor for any failure in the provided design and he should be liable for it. This can be done by an amendment to the contract.

    [Reply]

79. Sunil Says:
    April 7th, 2010 at 10:39 am

    This is an issue for requesting new rates for the design variation requested by the Engineer.
    However the contract states that all variation to be determined in accordance with clause 52 (Valuation of variations)

    Do we have right to request for new rates for all variation and we stand on our grounds that all varied works instructed by the Engineer to be assessed with present rates as the BOQ rates are are rates established in 2004

    [Reply]

    

    Samer H Skaik Reply:
    April 17th, 2010 at 2:26 pm

    Dear Sunil,
    BOQ rates can be used as a basis for evaluation provided they are reasonable and appropriate. Moreover, if the contract was extended formally via EOT claim, then your case will be stronger to claim new rates.
    Regards..

    [Reply]

80. Mohamed H Says:
    April 13th, 2010 at 4:03 pm

    Dear Sir,

    The Contractor submitted an EOT Claim with a Time Impact Analysis (TIA) based on ‘Impacted As Planned’ method . However, the Engineer (with proper reasons) is of the opoinion that this methodology cannot be applied in our Project and especially for the Events claimed.

    The Contract is based on Fidic 1987

    Now, my questions are;
    1) If the Contractor submit a revised TIA (prepared using another methodology), Engineer has to consider it or not?
    2) Is the Engineer bound to ask for a revised TIA before issuing final determination?
    3) If the Contractor fails to or refuses to submit a revised TIA, can the Engineer prepare one to justify the Determination?

    Thanking you in advance;

    Mohamed H

    [Reply]

    

    Samer H Skaik Reply:
    April 17th, 2010 at 2:34 pm

    Dear Mohammad,
    In general, there are many methodologies for delay analysis. adopting of any method depends on the complexity, the extent of the availability of information, etc…

    1- The Engineer is not obliged to stick to any method since the contract is silent about it. He also has the power to review Contractor submission and give a fair determination based on the Contractor submission beside his own exercise.

    2- Yes, he is if the request is reasonable and not to delay the determination purposely.

    3- Yes, he can.

    Regards..

    [Reply]

81. bernard Says:
    April 16th, 2010 at 3:46 pm

    Sir,

    We have just awarded EOT pursuant to Clause 44.1 under FIDIC contract 1987. However, the Client rejected payment for indirect cost (prolongation costs) on the basis that under Clause 44.1 only time is allowed for relief. Which contract provision In FIDIC 1987 can we claimed for indirect costs due to EOT…
    Thanks

    [Reply]

    

    Samer H Skaik Reply:
    April 17th, 2010 at 2:36 pm

    Hi Bernard,

    You need to refer to clause 53.1 to claim for such costs arisen from the extension of time.

    [Reply]

82. bernard Says:
    April 16th, 2010 at 4:03 pm

    FIDIC Contract 1987 provides Clause Clause 70 Changes in Cost and Legislation. However, this Clause From Sub-clause 70.1 to 72.2 has been deleted in the Contract Particulars. We have experienced sudden increased cost of materials during construction. How can we claimed the cost for fluctuation is our rights to claim for increase cost of materials extinguish due to the deletion of the fluctuation claus? Please advise.

    Thanks

    [Reply]

    

    Samer H Skaik Reply:
    April 17th, 2010 at 2:41 pm

    Dear Bernard,
    Since the contract now is silent about such matter intensionally, it is debatable. You can claim such costs and dispute it hoping that the applicable law provisions in your country allows something in your interest.

    [Reply]

83. Rafael (Muscat, Oman) Says:
    April 17th, 2010 at 3:16 pm

    Hi Bernand,

    I just want to add to Samer. I guess the ommission of the suceeding subcluses is an error as these clauses explain the ground on which claims could be granted namely if the increase in materials, labour is as a result of government legislation, increase in petroleum prices etc.

    You may need to arm yourself with he supportive documents that this increase couldnt have been forseen as a comopetent contractor.

    Where are you located? as this may help to offer you a better informed advice

    Cheers

    [Reply]

84. Vachhrajani Jayesh Says:
    April 19th, 2010 at 4:12 pm

    Dear Mr Samer
    Due to proximity of artificial creek in a project flooding occurs and water enters the ongoing project work of basement.Under the terms of contract FIDIC 1987, reprint in 1992, please clarify.
    1. Is this an Employer Risk?
    2. Is the contractor entitled for Extension of time along with prolongation cost.
    Thanks & Regards,
    Vachhrajani Jayesh

    [Reply]

    

    Samer H Skaik Reply:
    April 20th, 2010 at 9:44 am

    Hello Jayesh,

    Thank you for this question.
    This event is not an Employer risk. It is the contractor’risk and his insurance (CAR) usually cover such risk. Please review your premium conditions.

    Accordingly, you will not be entitled for cost or time recoveries from the Employer.

    Best regards..

    [Reply]

85. M.Owies Says:
    April 19th, 2010 at 11:34 pm

    I’m working in Dubai and my Company’s role in one project is MEP Subcontractor. GC (General Contractor) suspend all the works in the project due to his disputes with the owner regarding delay penalty which the owner decided to apply to GC and deduct its full amount from the GC’s next running bill. The suspension now is exceeding more than 100 days and we don’t have any idea when the GC will resume the work in the project.
    If Our Contract is not under FIDIC contract and there is no suspension provision in the contract agreement, is there any chance for us as a subcontractor to terminate our contract with GC after this long suspension period then claim him with all related damages?

    [Reply]

    

    Samer H Skaik Reply:
    April 20th, 2010 at 10:01 am

    Hi Owies,
    If there is no clause in your contract about termination, then you will need a court order to terminate your contract. Your case will be strong if you can prove that the other party is in default and he didn’t commit to his obligations under the contract. Refer to article no. 267 of the UAE Civil Code.

    Regards..

    [Reply]

    

    M.O. Reply:
    April 20th, 2010 at 6:54 pm

    Thank you Samer for your reply
    I already before i come here checked UAE civil code but i didn’t find any thing regarding my problem , the GC is not in default regarding our contract but may be he is in default with the owner
    and my question is how long i should wait the GC to resume the work in the project ? is there any limit ?
    also please consider the following additional information related to our contract :-
    1-We are nominated subcontractor in original
    2-our payment term in is back to back
    3-Termination for convenience is allowed in our contract with GC
    Is there any chance for us to recover our due payments with like this situation ?

    [Reply]

    

    Samer H Skaik Reply:
    April 22nd, 2010 at 10:08 am

    Firstly, the main contractor does not have the right to suspend the works on such basis, therefore, he is in default. You, as a nominated subcontractor can seek payment recovery from the Employer.

    Secondly, you need a lawyer to help you interpret the articles of civil code and how it can be employed to serve your case. However, there is a principle in the code that:

    If one party fails to commit to his obligations under the contract, then the either party has the right not to continue with his commintments under the contract. in other words, you can seek termination of the contract accordingly. please refer to article

    Moreover, you can refer to article 272 of the civil code.
    Under Article 272, if a party to a contract does not do what they are obliged to do under the contract, the other party may, after giving notice, require the contract be performed (specific performance) or cancelled.

    Regards..

    [Reply]

86. Vachhrajani Jayesh Says:
    April 21st, 2010 at 9:15 am

    Dear Mr. samer
    I am a regular reader of CMguide and the inputs are very educative.Please advice on following.
    In our contract BOQ various items are in provisional sums and at the time of award an amount is seta side for each item.While after actual nomination by client the nominated amount is less than the allotted provisional amount.Example is given hereunder.
    A Supply of ……………………..3,000,000
    OH & Profit @ 3.5% 105,000
    Attendence 172,500
    Builders work 172,500
    You will notice that the contractor has put 15% towards OH & P, Attendeance & BW.
    B On actual award the nominated amount is reduced to 2,000,000.Please advice if the contractor is still eligible for attendence and Builders work as per lump sum amount or to be adjusted to 15%.
    In the Appendix to the form of Agreement ,percentage of Provisional sums persuant to 59.4 c is 15%.
    Please advice
    Best reagrds.
    Jayesh Vachhrajani

    [Reply]

    

    Samer H Skaik Reply:
    April 22nd, 2010 at 10:25 am

    Hello Jayesh,
    Thank you for your question.

    You will be only entitled for 3.5% of the provisional sum amount plus 172,500 attendence and 172,500 BW. attendance and BW are lump sum amounts in BOQ and can’t be adjusted.

    If there was no provision for profit in the BOQ, then you could use 15% percentage in appendix to tender. Refer to clause 59.4 (C).

    Regards,

    Samer Skaik

    [Reply]

87. md sahir Says:
    April 25th, 2010 at 11:13 pm

    Dear Mr.Samer.

    Great Work, hands off to you.

    Regards

    Mohd. Sahir

    [Reply]

88. Mohamed A. A. Says:
    April 28th, 2010 at 12:46 am

    Dear Mr. Samer,

    Really great work, I appreciate.

    i would like to ask about the Engineering in the Fidic 87 how is be obligated in such contract however he is not a representative party?
    on other hand i heard about the fidic white book so it related?

    Best regards

    [Reply]

    

    Samer H Skaik Reply:
    May 4th, 2010 at 5:13 pm

    Dear Mohammad,
    I wish I understood you correctly.

    Engineer should work impartially in the project according to FIDIC 1987 regardless of getting paid by The Employer.

    FIDIC white book is the standard form of contract for consultancy services between the Employer and the Engieer. It doesn’t force the Engineer to give any determination in the favor of the Employer at all.

    [Reply]

89. Mohamed A. A. Says:
    April 29th, 2010 at 5:07 pm

    Dear Mr. Samer,

    I would like also to ask you if it legally applied and correct if i stated in the special conditions of Fidic 87 that “the clauses of “Claims, Disputes and Arbitration” article 20 of Fidic 99 shall substitute the clauses from 67.1 to 6.4 of Fidic 87″
    in order to avoid the tricky procedures of Fidic 87>

    Best Regards
    Mohamed A. A.

    [Reply]

    

    Samer H Skaik Reply:
    May 4th, 2010 at 5:15 pm

    This is not a good idea Mohammad.
    The sturucture of Fidic 1987 is totally different and you need to specificly amend any the clause you don’t like using the description from other source provdied it will not create any confusion or contradiction in the contract documents.

    [Reply]

90. Omar Says:
    May 4th, 2010 at 3:30 pm

    Realy it is a GREAT WORK.

    Dear Samer, I would like if you can help me to find UAE Civil Law or in other words UAE Construction Law whether as PDF File( Which I prefer) or as Hard Copy.

    Regards

    [Reply]

    

    Samer H Skaik Reply:
    May 4th, 2010 at 5:17 pm

    I have a hard copy of the Civil code concerning Muqawala contracts and the general articles. I will try scanning and send them to you shortly.

    [Reply]

91. Ramy Emad Says:
    May 10th, 2010 at 2:08 am

    I have a situation here: For one of our projects the contract is not FIDIC, we have submitted our program of works and it is approved. The original duration of the project is 30 months. Then the client has nominated a new consultant instead of old one. We have been requested to revise the program after adding agreed extension of time. Then we have submitted the program to consultant to approve. Current situation on site that client has the control on some finishes items. Those item are in delay due to late nomination by client. In order to cover client delays due to late nomination, we got comments from the consultant requesting us to reduce the tiles duration in each floor from 10 to 8 days. Now the program consented with comments by which one of them about the tile installation duration.
    My questions are:
    1-Does the consultant have the right to ask for this reduction? If yes, based on what? Conditions of contract or best practice?
    2- In this situation could I based on the consented program submit an extension of time claim? If no, what to do to approve my right for entitlement?

    [Reply]

    

    Samer H Skaik Reply:
    May 10th, 2010 at 9:59 am

    Dear Ramy,

    Thank you for this question.

    As I understood, there is a delay from the Employer in doing his part of procuring/selecting finishing materials, therefore, you are requested to squeeze some critical activities to creat a float in the program to absorb the Employer’s delay.

    I would like to pay your attention that the appointment of another Engineer should be approved by you first as it may affect your price and programme of work depending on the case.

    About your questions, I reply in the same order as follows:

    1- The Engineer has simply asked you to accelerate the activity supposing that the reduced duration is still reasonable to complete the activity. If you prove that it can’t be done without extra payment, then he has no right to request so.
    Hint: Check the normal productivity of your labours and the allocated resources for this activity to prove your case.

    2- The consented program is considered the project baseline program. Both parties of the contract can monitor the project delays accordingly. You may -at any time- submit delay notices followed by the EOT claim particulars as per the timeline stated in your contract.

    Please don’t hesitate to approach us for any further clarifications.

    Samer Skaik

    [Reply]

92. Ramy Emad Says:
    May 10th, 2010 at 4:38 pm

    Dear Dr. Samer,

    Thank you very much. According to your second reply, I may submit delay notices, but What can I do to approve my right for entitlement?

    I want to know the consultant have the right to ask for the reduction in time based on what? Conditions of contract or best practice?

    Thank you very much and I really appreciate your reply
    Ramy

    [Reply]

    

    Samer H Skaik Reply:
    May 16th, 2010 at 9:35 am

    Hello Ramy,
    Engineer’s determination is based on the best practice if there is no clear provision in the contract to refer to but you still have the chance to oject his determination and request Engineer’ decision then follow dispute resoultion provision as stated in the contract.

    I already clarified in the previous response the extent of the right that may be exercised in case of reducing a task duration. You need to examine if you really can do such task with the same planned resources or not. Accordingly, you may have a room to challenge such request.

    Regards..

    [Reply]

93. soomun Says:
    May 13th, 2010 at 4:40 pm

    how can you demonstrate a delay event and showing its effect on a program works.

    [Reply]

    

    Samer H Skaik Reply:
    May 16th, 2010 at 9:39 am

    Hello Soomum,
    There are many methodologies for delay analysis. The easiest one is to insert the delay event as a new activity in the programme then run it to see how such delay affects the date for completion.
    The delay impact will be calculated as follows:
    Revised date for completion – original date for completion = EOT duration

    I also refer you to CMGUIDE articles about the same issue. Kindly use search form to find out.

    Regards..

    [Reply]

94. imran usaf Says:
    May 17th, 2010 at 11:01 pm

    hi dr samer
    this is great to see ur guidance page.
    this is really a great job
    i want to thank u as while reading ur replies to others i got a lot of knowledge
    regards
    imran usaf

    [Reply]

    

    Samer H Skaik Reply:
    May 22nd, 2010 at 9:56 pm

    Thanks Imran,
    We really hope that we offering something of value to you..

    Keep in touch

    Samer

    [Reply]

95. soomun Says:
    May 21st, 2010 at 11:10 am

    please conform to me the following:

    when a contractor apply for a claim of extension of time.

    in accordance with FIDIC 1999 is it within 42 days from date of our application that the project manager shall give his response.

    and if he does not response within that period; what are the consequence.

    [Reply]

    

    Samer H Skaik Reply:
    May 22nd, 2010 at 10:03 pm

    Dear Soomun,

    If the Engineer does not give his determination whether with approval or disapproval within the 42 days, the Contractor has the right to claim damages or losses as he feels appropriate provided he serves a notice in this regard.

    I suggest to keep pushing the Engineer to give his determination and involve the Employer in this matter till it is settled.

    Warm Regards,

    [Reply]

96. soomun Says:
    May 21st, 2010 at 11:39 am

    when claiming for a variation works can i claim also the supervision cost.

    [Reply]

    

    Samer H Skaik Reply:
    May 22nd, 2010 at 10:05 pm

    Hi Soomum,
    If the supervision cost is not included for the contract period in the contract (usually in preliminaries), then you are entitled to include all costs necessary to execute the variation works including supervision.

    Regards,

    [Reply]

97. Hamid Says:
    May 24th, 2010 at 1:33 pm

    We are executing a Project in Pakistan under FIDIC 1987 edition. We offered a rebate of 5% at our bid price, which was applied to BOQ unit rates. At later stage some design changes and new works incorporated and BOQ rates applied for the additional quantities. For this varied work the rebate will be applied on BOQ unit prices or not……………..

    [Reply]

    

    Samer H Skaik Reply:
    June 2nd, 2010 at 6:07 pm

    Hi hamid,

    I have already answered a similar question above. In your case, you should apply such percentage for variation works since it is not a lump sum discount on the contract price.

    In addiiton, keep in mind the BOQ rate can be used as a basis for evaluation of variations if such rate is appropriate.

    [Reply]

98. soomun Says:
    May 25th, 2010 at 4:41 pm

    In accordance with fidic 1999 a contractor shall give notice prior to ask for extension of time.The contract clearly described the time bar for claiming extension of time.

    If the contractor have not submit notices; Is the contractor lose his entltlement for extension of time?

    I hear that there is remedy in common law under the doctrine of” unjust enrichment”. Is it true? please explain.

    If it is true why putting such clause in contract where legally it is not binding.

    Your comment on this matter will be much appreciated.

    [Reply]

    

    Samer H Skaik Reply:
    June 2nd, 2010 at 6:14 pm

    Hi Soomum,

    This is a very interesting question.

    Contractually, the Contractor will lose his entitlement. Legally, it depends on the governing law.

    From my expereince, common law and UAE civil code do not deny such entitlement. Under law, The Employer can’t get benifit or add value to his property without paying for it regardless a notice is served in this regard or not.

    FIDIC is an international standard form of contract and the governining law can overrule it if there is contradication only which may not be the case sometimes.

    Regards..

    [Reply]

99. Yoga Says:
    May 30th, 2010 at 2:07 pm

    In contract evaluation, if the team fails to detect an error and it is done later during the excution of the contract what happens.

    [Reply]

100. Yoga Says:
     May 30th, 2010 at 2:14 pm

     I mean an arethmatic;1. error not in the rates but in carring forward totals.2. Error in quantities 3.omittions in boq

     [Reply]

     

     Samer H Skaik Reply:
     June 2nd, 2010 at 6:17 pm

     Hi yoga,

     If it is a lump sum contract, then the contractor has to perform the work agianst the fixed lump sum price. There will be no remedy for the original scope of work.

     [Reply]

101. Zenith Sharma Says:
     June 3rd, 2010 at 2:43 pm

     Dear Mr. Skaik,

     In FIDIC 1999 Red Book, we are much confused with the two words “consent” and “approval”. In the dictionary, we found the similar definitions. What are the fundamental difference between these two words? In which conditions, we use “consent” or “approval”? Is there any written confirmation required in the case of “consent”?

     Hoping for your kind response in this regard.

     Zenith Sharma

     [Reply]

     

     Samer H Skaik Reply:
     June 7th, 2010 at 9:41 am

     Dear Sharma,

     This question is not confusing you only. it did with the committee members of FIDIC who are drafting and updating the provisions of FIDIC forms. I asked the same question to them but there was no definite answer.

     According to them, there is no significant difference as both words mean to ‘give permission’.

     In my opinion, there is a differecne in terms of the nature of obligation assoicated with the use of each of them. ‘Approval’ seems to have a stronger impact than ‘consent’.

     Regards

     [Reply]

102. Felicia Cheah Says:
     June 7th, 2010 at 8:56 am

     May i get your assistance on :-
     a) delay due to NSC & subsequent LAD was imposed by client, can we reject OR re-navigate to NSC ?
     b) if yes, how to impose & get deducted from NSC since the payment made to NSC is directly from the client ?
     c) any better choice on win-win situation ?

     Thank you. rgds.

     [Reply]

     

     Samer H Skaik Reply:
     June 7th, 2010 at 10:03 am

     Dear Cheah,

     The answer may vary depending on the terms and conditions of the nominated subcontract agreement. however, I can give a general answer to your question in light of the standard forms of contract:

     a) You should accept the LAD’s and deduct all losses and damages from your NSC.

     b) I think that the contractor is processing the payment appplication for all his subcontractors in cluding NSC and The Employer will pay accordingly provided there is an agreemnt in this regard. You may implement the deduction in such payment. If not applicable, try to have a joint meeting with the Employer to seek a solution.

     Otherwise, you may seek arbitral award or a court order, and most probably, you will win te case depending on the extent of the soundess of your contemporary records.

     c) Negotiation is the best approach. Try to stick to it as long as your rights are not compromised.

     If you need further assistance, you may approach me via my email.
     samer@cmguide.org

     Warm Regards.

     [Reply]

103. Barhoumy Says:
     June 12th, 2010 at 4:56 pm

     I am working with a contractor in UAE, in a major project and we are in a process of submitting a negative variation order upon Engineer Instruction. The condition of contract is FIDIC 4th edition 1987 reprinted in 1992, and the contract is a lump sum.
     Regarding the Negative Variation Order, Please confirm that can we Add the overhead & profit to this Negative Variation instead of claiming the same later on? Or we can’t , As per condition of particular which states the following:
     “”
     CLAUSE 52
     Sub-Clause 52.1 – Valuation of Variations
     “Delete the text of the Sub – Clause and substitute.
     All variations referred to in Clause 51 and any additions to the Contract Price which are required to be determined in accordance with Clause 52 (for the purpose of this Clause referred to as “varied works”), shall be valued at the rates and prices set out in the Contract if, in the opinion of the Engineer, the same shall be applicable. If the Contract does not contain any rates and prices applicable to the extra or additional or omitted work or if any rates and prices stated in the Contract are unreasonable in the opinion of the Engineer then suitable rates / prices shall be determined in line with the following basis of calculation for each element of work:
     a) Actual cost of material delivered to site
     b) Actual cost of labour.
     c) Actual cost of plant and machinery.
     Actual costs shall not include any off site or on site management costs or other overhands.
     Overall mark-up for each type of works have to be agreed upon between the Engineer and the Contactor according to nature of work, but not exceeding the following maximum limits of each type of work:
     a) For work performed directly by the Contractor: – 10% of actual costs
     b) For work performed by Subcontractors other than nominated Subcontractors:

     Subcontractor’s mark-up = 10% of actual costs.
     Contractor’s mark-up = 8% of Subcontractors cost (exclusive of mark – up).
     c) For work performed by nominated Subcontractor (nominated by the Client):

     Nominated Subcontractor mark-up = 10% of actual costs
     Contractor’s mark-up = 8% of nominated Subcontractor’s costs (exclusive of mark-up).
     Actual rates and prices should be calculated after all trade discounts and the Contractor should support the cost estimate for each element of related works by the provision of evidence of applicable actual expenditure to the satisfaction of the Engineer.
     The Contractor shall bind his Subcontractors to the same method of calculation and mark-up limits for the cost of variations as the Contractor is bound under this clause.
     Wherever the BOQ rates are used in the evaluation of variations as per the first sentence of the first paragraph of Sub-Clause (52.1), the Contractor shall not be entitled for any mark-up and shall not be entitled for any additional payment. ‘’’’
     Kind Regards

     [Reply]

     

     Samer H Skaik Reply:
     June 22nd, 2010 at 3:24 pm

     Dear Barhoumy,

     I understand that your question is about the compensation of overhead and profit as a result of ommission of part of original scope.

     If this is the case, you can only claim H.O. Overhead at the end of the project when it is concluded that the variations are exceeding 15% in negative pursuant to clause 52.3

     You are not intitled to claim “loss of profit” unless the omitted work is going to be awarded to another contractor whethere prior or affter the issuance of taking over certificate.

     By the way, I like the particular conditions you insert here. Thank you for that..

     Please approach me again if I misunderstood your question or if you have further query.

     Regards..

     [Reply]

104. akbalfour@gmail.com Says:
     June 17th, 2010 at 6:03 pm

     Hi Samer,

     Firstly, can a Consultant simply amend the Preliminaries of a Contractor’s contract, without consultation? And secondly, if provisional Sums are used in the Prelims for say ‘the employer’s telephone line’, can this be omitted in the calculation of the running cost value?

     Best regards

     [Reply]

     

     Samer H Skaik Reply:
     June 22nd, 2010 at 3:28 pm

     The first part of the question is not clear. Please elaborate on the case.

     About second question, if you got an instruction that provisional sum is to be expended, then the Engineer has no right to deduct the relevant amount fro mthe running cost

     Regards..

     [Reply]

105. akbalfour@gmail.com Says:
     June 22nd, 2010 at 5:13 pm

     Hi Samer,

     Re-your response to elaborate on the first part of the question: A Prelims breakdown was provided to the Consultant, showing the various allocations to the items as per the initial, running and final costs, based on the scheduled timeline. The allocations were then amended after being submitted to the Consultant to suit their take on the it. Again, can they do this? I hope this clarifies the mix up.

     [Reply]

     

     Samer H Skaik Reply:
     June 23rd, 2010 at 3:07 am

     Since the prelims breakdown is not part of the contract documents, the Engineer has the right to give his determination as he feels appropriate. However, I understand that the prelims are usually lump sum items and regardless of the breakdown you need to give for easy valuation of your interim payments, you are still eligible to receive the full prelims amount on project completion.

     Best regards.

     [Reply]

106. barhoumy Says:
     June 23rd, 2010 at 1:28 pm

     1. Thank you for your prompt reply , further to my query for the negative Variation of Lump Sum Contract , pls advice whether we can add OH & profit for omission of Duplicate BOQ Item or not.
     2. In addition, when the Engineer can Use Star Rate to issue variation order for Lump Sum Contract ( Fidic 1987).

     [Reply]

     

     Samer H Skaik Reply:
     July 15th, 2010 at 11:48 am

     Dear Barhoumy,

     1- There is a misconception here. You can’t omit any work unless it is shown on drawings or specifications. BOQ is only schedlue of rate and any error or duplication can’t be rectified through variation procedures.

     2- If the item under concern can’t be evaluated based on BOQ rates, then Contractor shuold build up new rate which will be subject to Engineer determination. Engineer still has the right to fix the rate as he feels appropriate.

     Regards,

     [Reply]

107. akbalfour@gmail.com Says:
     June 30th, 2010 at 5:29 pm

     Hi Samer

     Is there any specific clause under FIDIC or any case law, which states that if there is a material increase in cost of a priced item in a BQ, say for instance reinforcing steel, that the Contractor can only be paid for the additional increase in cost, exclusive of OH & Profits? Is there no entitlement to this and/or can it be claimed for otherwise?

     [Reply]

     

     Samer H Skaik Reply:
     July 15th, 2010 at 11:57 am

     Dear,

     Clause 70.1 of FIDIC 1987 reprinted in 1992 deals with the increase or decrease in cost. About profit and overhead, it must be considered when calculating the impact of changes, as a fair practice unless it is mentioned otherwise in your contract documents. Clause 70.1 refers to ’sums’ not costs which means that markup can be considered.

     [Reply]

108. soomun Says:
     July 7th, 2010 at 3:23 pm

     hi everybody

     i would like to discuss an interesting case and would like to have your comment.

     we got instruction from the PQS to appoint a nominated supplier for the sanitary appliances and accessories.

     We appointted the subcontractor and ordering as per the quantities and specification given by the PQS. the delivery time was 4 months from date of order.

     The supplier made his order with his overseas supplier and the goods will arrive in the country by the end of june 2010.

     The issue is the bath tub and the fittings.

     The supplier ordered the bathfiller as per the reference in the PQS list.

     when the supplier deliver the bathtub and the fitting to site , the contractor noticed that the fitting (i.e bath filler)the length of the pipe from the tap to the waste is short and need to be re-order.

     The supplier did not accept this responsibility and said that what have been ordered according to the reference in the PQS list is a standard one and another type of bathfiller is required to cater for that.and that will involve additional cost.

     The supplier is asking for an extra over cost for re-order of the new fittings.

     My question; who will bear the extra cost, the main contractor,the supplier,the PQS,the Employer.

     Please advise.

     [Reply]

     

     Samer H Skaik Reply:
     July 15th, 2010 at 6:15 pm

     Dear Soomum,

     You have to consider many things to answer this question.
     The form of contract between parties, contractor’s objection right of nomination, contractor’s involvement in preparing nomination package, etc…

     Anyway, as I understood, the Contractor was not involved at all in the selection and supplier has supplied material as per order, so the PQS is liable for such error. Since PQS is employed by the Employer under a specific service agreement, Employer will be obliged to pay the extra cost and compensate Contractor for the delay and he may seek to deduct damages from his PQS if the contract allows him to do so.

     Regards,

     [Reply]

109. nerses Says:
     July 13th, 2010 at 6:45 pm

     Hi everybody,

     I need advice on the following issue.

     FIRST,
     The contract is fidic 1987 reprinted 1992. Contract B.O.Q. includes division 1 for general requirements it is priced by us and it represents almost 4% of remaining total contract price.

     The Engineer recently and during his determination to submitted variation order decided to deduct an additional 4% as prelims on the “omitted part” of variation order and claimed that the 12% which he is adding as overhead & profit to the “addition part” of the same variation already includes the prelims which he previously deducted.

     The above referenced variation order has only cost impact without any time impact on project completion date.

     My question is:
     1.- Does the Engineer have the contractual right to deduct prelims from omitted part of any variation order?
     2.- Other unit rates in B.O.Q. under divisions 2 to 9 already include overhead & profit. Are the prelims under division 1 the same as the O&P priced seperately for each iten under other divisions?

     SECOND,
     The Engineer consented to the addition of 20% as overhead & profit on dry cost for numerous variation orders submitted by the Contractor. Almost about 30 variation orders. Recently, he decided that the O&P % for any further variation order shall be 12%.

     Does he have the right to do so under the contract?

     I am anxious to receive your reply.

     Best Regards,

     [Reply]

     

     Samer H Skaik Reply:
     July 19th, 2010 at 1:59 pm

     Dear Nerses,

     preliminaries only include site overheads costs during the project life cycle from commencement to completion. off site overheads and profit are distibuted on the main works in the BOQ.

     There will be no alteration to the sum of preliminaries unless the contractor is granted an extension of time. Variations whether additions or omissions have nothing to do with preliminaries and the Engineer has no right to add or deduct from it for the assessment of variations of whatsoever nature.

     if your contract is silent about the percentage of overhead and profit, then the Engineer has the right to ask for a proof about the actual offsite overhead and he will determine a reasonable profit. Engineer may revise any assessment he gave before for variations as he believes appropriate. The contractor is still entitled to dispute any unfair determination or decision in this regard.

     Please don’t hesitate to contact us for any further clarification.

     Samer Skaik

     [Reply]

110. Idris Meer Says:
     July 28th, 2010 at 5:07 pm

     Dear Samir,

     I am working for a construction company as a planner in Dubai. We had delays in the project during its progress. We submitted 9 separate claimns for 9 separate events. The cummulative of 9 events was coming around 142 days. Consultant approved 78 days. Now there has been an argument between myself and consultant regarding the analysis.
     Consultant actually checked just only the actual dates from asbuilt program and impacted on baseline program which gave him 78 days which were exactly the delays which were showing in the update program which nullified all the good work done by us during the project and it also implies that if we had ben slow in our work we would had got more days.
     My analysis included the following principle points.
     1. Analyze each claim as a separate event.
     2. Provide documentry evidence in supprt of our claim.
     3. Use Asbuilt program / Updated program to get the information regarding the events.
     4. Finalise the delay for each separate Event.
     5. Impact on the baseline program by adding a constraint on the respective activity.

     Now we have agreed for a third party mediation. Kindly advise me about my analysis method.

     [Reply]

     

     Samer H Skaik Reply:
     September 1st, 2010 at 12:09 pm

     Dear Idris,

     There are many methodologies of delay analysis. Selecting any of them depends on many factors such as the accuracy of work programme, availability of contemporary records and the comlexity of delay events.

     In general, the Engineer seems fair in his determination as there was no further delay in light of the critical path anaylsis. You may have a case if you have conveyed to him in writing about accelearation and if you have served a ntoice to claim additional payment or the like.

     In the absence of due detemrination by the Engineer on any claim. the Contractor may be confused whether he should accelerate to avoid LDs if his claim is rejected or to keep the rate of progress as it is and accordingly his entitlement -if any- will be limited to the actual delay incurred to projecr progress.

     Regarding your analysis, a) you need to demonstrate the concurrent delays if any by using critical path analysis. This will enable both of you to determine the dominant delays and liablities of each party accordingly b) You need to have an updated programme reflecting the actual progress of critical activities when each event has occured prior to adding the delay events. c) You can impact the actual delays on the base line programme if it still has proper logic and has no errors, otherwise, you may only be entitled for the maximum delay you got from each delay event only.

     I advise you to read the two articles about the delay analysis in CMGUIDE for further info.

     Regards,

     Samer

     [Reply]

111. Upali Mallawaarachchi Says:
     August 3rd, 2010 at 2:06 pm

     This is regarding an expressway contract based on FIDIC 1987. Contractor has shown 35% as his overheads and profit percentage in the tendered rate breakdown, which was submitted as a supporting document only, but not a fully binding document in the Contract.

     For new items instructed, it is essential to use 35% mark up?

     Can the Engineer use different percentages for different new items, based on the Contractor’s involvement on each item? e.g. if it is only supply of some goods (directly bought from a shop), a smaller percentage such as 10%

     [Reply]

     

     Samer H Skaik Reply:
     September 1st, 2010 at 12:14 pm

     Dear Upali,

     In the absense of an express term fixing the markup on variation items in the contract, the Engineer should fix a reasonable profit on all items and request the Contractor to submit evidence about HO oveheads (Usually calculated as a n average of the last three years from the Audit report).

     It is neither reasonable nor apprpriate to vary the markup percentage depending on the nature of the vairation item.

     Regards,

     [Reply]

112. Upali Mallawaarachchi Says:
     August 3rd, 2010 at 2:36 pm

     This is regarding an expressway contract based on FIDIC 1987. Contractor has indicated 35% as his overheads and profit percentage in the rate breakdown submitted with the tender. The rate breakdown is only a supporting document, but not made a part of the Contract.

     Is it compulsory that the Engineer should use 35% when fixing new rates for new items?
     Can the Engineer use different percentages for different type of new work depending on the extent of involvement of the Contractor?
     eg: Supply of an item of goods directly from the shop may need a smaller percentage such as 10%.

     [Reply]

113. Tasnim Yusoff Says:
     August 11th, 2010 at 11:38 am

     Hi all,

     I need advice regarding this issue.

     Im doing EOT program for my client which is the mechanical and elenctrical contractor. I dont have lots of exerience regarding EOT program.
     At my site we have lots of area of cncern issue (AOC). I need to put most of the delay event indide my programme. SOme of the AOC issue happened at certain area at each floor which we still can carry on with another job at da same time.
     How to put all thise issue inside the programme and link it to the activities inside the primvers? As some of the activities already start anf some stil nit started..

     Tq
     Tsx

     [Reply]

     

     lumulal Reply:
     August 29th, 2010 at 1:09 am

     Dear Mr. Yusoff,

     My suggestion is that to prepare a cronological events of delay Items. and input the actual dates against the impacted items in the programme. prepare a comparitive study between the approved programm and the impacted programm. that will be clear to justify your EOT, if you already noticed to the client with the time FIDIC allow.

     Hope it will Help you.

     [Reply]

     

     Samer H Skaik Reply:
     September 1st, 2010 at 12:18 pm

     Dear Tasnim,

     The easiest way to analyse the delay for the contractor is to use Impacted As planned method.

     You need to inset the delay event which is incurred already as an activity in the programme with a duration reflecting the actual delay then link it with the succeeeding activities that will be physically affected by it. The change in the date of time for completion will reflect your entitlement for EOT.

     Regards,

     [Reply]

114. soomun Says:
     August 20th, 2010 at 11:32 am

     hi everybody

     If there is a variation work to a nominated subcontract work, can i increase the % of attendance and profit on the variation works or the % of attendance and profit priced in the contract shall be applied on the variations works.

     Wait for your quick response

     Soomun

     [Reply]

     

     Samer H Skaik Reply:
     September 1st, 2010 at 12:26 pm

     Dear Soomun,

     It is difficult to change the profit percentage unless you prove that this percentage is inappropriate. About attendence, you can claim the actual attendence incurred for the variation works such as special scaffolding.

     Regards,

     [Reply]

115. Adel94 Says:
     August 25th, 2010 at 2:36 pm

     Dear Samer,

     I have a para in BOT contract which i do not like but we can not change it. So please advice how to act aginst such thing if happen during the construction of the project.
     ” During any stage of the Project construction work OWNER reserves and shall have the right to reject any materials, supplies, tools, machinery or equipments which, in its reasonable judgment, do not(a) adequately satisfy or conform to the Specifications, or (b) do not include all services required under this Usufruct Agreement. Accordingly, OWNER may, in its sole discretion, issue an order to the Developer directing him to do, at its expenses, any or all of the following:
     Remove and/or replace from the Project Site any materials, machinery, equipment or supplies that OWNER, acting reasonably, deems defective or not in conformity with the Specifications, provided that such removal must be carried out in an orderly fashion and within the time frame specified by OWNER’s said order.
     Remove any work not in conformity with the requirements of this Usufruct Agreement as deemed reasonably by OWNER with respect to meeting the quality standards for materials and workmanship embodied in the Specifications, notwithstanding any previous approval granted regarding the same
     “

     [Reply]

     

     Samer H Skaik Reply:
     September 1st, 2010 at 12:32 pm

     Dear Adel,

     If the Employer -in your point of view- misused this clause, you may serve a notice of a counter claim as may be stated in your contract and you should keept such contemporary records that substantitate your argument. This is to prepare you for any dispute that may go to arbitration or courts.

     Regards,

     [Reply]

Leave a Reply