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Dear Sir, According to Sub clause 4.2 FIDIC 1999, The Contractor shall obtain (at his cost) a Performance Security for proper
performance,… No amendment of this sub clause was made in the Particular Conditions. But there is item in the BoQ to pay for the performance security. The question is if the payment is due?
Thank you and BR,
Dear Kahn
The contractor was aware that he is to procure the bond on his cost that is why hehas already included such cost in the BOQ as part of the site preliminaries. As such, he is entitled for that item.
Dear Mr. Samer,
Can you pls. advise the contractual / legal solution for the Contractor on the below issue.
Under the main form of contract FIDIC 1987, the Contractor received an Engineer’s instruction to re-work the painting finish as the client requested a change in the colour of the external wall surface. This instruction came through after the Contractor had finished the External painting with a height of 15 meter based on originally approved contract specification and colour. The Contractor had also dismantled the scaffolding and returned the scaffolding materials to their central store yard.
Based on the above Engineer’s Instruction, the Contractor had again mobilised the scaffolding material from their central store yard and re-erected the scaffolding and completed the re-work as per the Engineers instruction.
Since the Contractor had erected the scaffolding specifically for the painting re-work instruction, the cost of scaffolding was not deemed to be included in what the Contractor had originally allowed for scaffolding cost within the BOQ price for External painting. Hence, the Contractor had notified the same to the Consultants and claimed the painting by using the contract BOQ price, less the percentage of preliminaries (which is inclusive of scaffolding cost originally allowed) and added the actual cost of Scaffolding for these re-works.
During the evaluation of above variation by the Engineer, they rejected the additional cost of scaffolding (based on the actual cost) and informed to the Contractor that according to the contract Clause 52 (1), all the variation work done by order of the Engineer shall be valued at the rates and prices set out in the Bill of Quantities, if and to the extent, in the opinion of the Engineer, the same shall be applicable. Hence, the Consultants had considered the same rate as per BOQ for the painting re-work.
What do we need to do to find out a appropriate response to the Consultants which would safeguard the interests of all the parties involved.
Dear Krish
Sorry for the delay as I was stuck in too many pressing matters.
Let me clarify some issues first. The cost of scaffolding as temporary equipment is included in preliminaries while the erection and dismantling is included in the rate of the work in which the scaffolding was used for.
The BoQ rate is applicable in variations if such variation is done within the normal sequence of activities and where the nature of the work has not changed. In your case, the scaffolding was removed from site after completion of the relevant activities.
This would mean that the paint rate shall be used as it is in addition to the cost (as well as the relevant profit) of hiring and bringing the scaffolding back to site and demobilizing it later on for this specific task.
Regards,
Samer Skaik
Dear Mr. Samer,
Good morning I got an issue in my variation in which the contractor base their cost saving in remeasured drawing quantity in which in BOQ the quantity is much more than the shop drawing.Which will govern the BOQ or the revised drawings. the contract is Lump sum?
Thank you and regards,
Dear Tol
The BOQ is only acting as a sechedule of rates. Any variation (addition or ommission) should be assessed from the actual quantities measured from drawings. You may refer to many other previous questions in this page for more details.
Does liquidated damage be applicable in a consultancy form of contract ?
In this case, the consultant is 100% paid upon completion of the study and submission of the assessment report
Dear Rennie
If LDs are stated in the consutlancy contract, then the consultant will be laible to pay the relevent amount upon delay.
In some countries like the UAE, the court may opt to waive part or whole of LDs depending on the case and actual loss incurred by the Employer due to the delay.
Anyway thank you very much for the reply.
Dear Mr. Samer,
I am a Chartered Civil Engineer.
I am grateful, if you would kindly advise me the different ways in practice, on charging for Preparation of Construction Claims.
I hope it is correct as per my experience that, any Claim Consultant can not ensure whether his presentation will be successful, how accurately it was prepared and justified mainly because, most of the staff of the Client (Engineer to the Contract) who recommend the Claim to the Engineer are not impartial, and Engineer will never approve a claim without the recommendation of his subordinate staff.
But the Claim Consultant has better confidence on the subsequent Adjudication/Arbitration.
Under such circumstances what should be the Agreement to be reached prior to accepting the case.
If possible, please provide full details with reference to further readings and sample documents to get my knowledge enhanced to prevent any future adverse effects mainly in getting the agreed payment.
Thank you in advance.
Dear Basil
This is a pure commercial issue that falls outside the scope of this service. Apologies not to be able to help in this.
Kindly guide me on the Main Contractor’s repeated request for extension of performance bond .project commencement in April ’14 Original Completion period was in July 14 . Performance bond was given to cover this period . later they asked extension till Dec 14 and then till June 15 which was done . Now main contractor is again requesting for extension of performance bond till project completion . The subcontract work is 99.5 % completed , pending work due to lack of clearance from Main Contractor.
Dear Ashfaq
Standard forms of subcontract requires unconditional performance bond to be available till the practical completion then revised to cover the defect liability period.
Hi,
I would like to ask if the company (interior design) can claim from original contract when the owner/designer change the design.
We have a signed contract and during the process the designer change the design and give to other contractor. Result, that items will be deduct to our contract. Kindly give us further information with this situation and can we claims loss of profit with this matter.
Thank you.
Dear Jessa
If the work was omitted from your contract and given to others while your expertise allows you to do such work as variation to the contract, then you will be entitlted to claim loss of opprotunity from the Employer.
Hi,
I am working on a project that there was an unforeseen physical condition encountered in the project set back.
1- would the Contractor be entitled for time and cost if the design limit falls away from the set back limit / while it was a contractor’s choice to make the design build shoring in the set back limit
2- what about the risk / who is liable for the risk if damages occur
Thanks
Dear AAAa
Thisi s a very interesting question. The contractor will have difficulty to justify his claim for compensation since he was supposed to abide by the plot limits unless it is practically impossible to accomodate shoring system without changing the building design.
Hi,
I would like to ask if it is not contractual as a Contractor to issue notices for delay and time extension in accordance with the Contract (SCl 8.4, 20.1, etc..), if an event is not surely or likely to affect the time for completion.
Noting that EOT claim will surely not be submitted at a later stage if no evidence would prove impacting time for completion.
The intention of the notice, would be just:
1. to reserve the Contractor’s right for delays/costs if incurred, or
2. highlighting employer’s events – for record, or
3. stating concurrency (disruptions/re-sequencing impact) esp if at the end the Contractor caused delays
Thanks
Hi AAAa
It is a contractual approach to serve delay notices whether the physical delay is going to happen or likely to happen. However, you may need to be careful not to abuse the benefit of serving notices since the Engineer should not be distracted with tens of unjustified notices.
Dear Sir,
We are a specialist company that designs and manufacturers Horse Stable Doors windows stall front etc. We had recently completed a 81 stall project in Abu Dhabi through a contracting company.
Recently the VIP client has the same contracting company to build another stable to accomodite 41 horses, the contractor has taken the shop drawings that we had provided after we completed the first set 81 stall project and given it someother fabricating company to manufacture the stall fronts the main barn doors.
Is this legal, as the design of the stall doors are from my company and we had submitted the shop drawings to both the contractor and the conslutants as required by the contract. Please advise.
I think it is morally not correct what they have done.
Regards
Shashi Thomas
Stableforce Trading LLc, Dubai
Dear Shashi
Under FIDIC yellow book (design and build), the contractor intllecutual property rights are protected pursuant to clause 1.10. In your case, if the cotnract is silent about this, you may need legal advice to see how the UAE civil code deal with this matter and I think it gives you similar protection.
Hi Samer,
I hope you are well.
I am working based on FIDIC Red Book Contract in Abu Dhabi. Can the ‘certified payment due date’ forwarded by the Engineer to the Employer for payment be revised?
For example, the Engineer certified that the payment due date is on 31 May 2015 but due to some issues on the supporting documents received from the Contractor, the payment due date is now to be revised to 15 June 2015.
Appreciate your thoughts.
Thanks.
Dear Isamil
If the Contractor did not cause any delay in the certification of the progress payment, the engineer must certify the payment in accordance with the contract and payment due date must be respected by the Employer.
Sometimes, you need to use politics with the Engineer so it is not in your favour to upset him with such issue unless the matter is crucial for yuor survival.
Hi,
I am working on a ICD 2011 form of contract with contractors design. The client has asked to undertake the final clean of the building direct. Can they adjust our prelims and omit the cost we had in for this?
Thanks
Dear Andrew
If the final clean of the building is variation to the contract, then it should be measured in accordance with the relevant clause.
If it is part of the contract but you do not wish to do the work, you may have mutual agreement to omit relevant item from prelims. If no agreement is reached, you will be obliged to clean at no extra cost or time.
Respected Sir,
AoA. I was please to find you out as I was needed help from some professional person….The case is
I have come 2 recent project 1.5 years ago on Engineer’s side, the details of the Contract are,
Commencement date: 12 Dec 2009
Contract Completion period: 365 days
Contract Completion date : 11 Dec 2010
Engineer validate EoT-1 of 450 days upto 5th Mar 2012 based on admissible Delaying events considering cut-off date to be 31st Dec 2012. THe gap between cut-off date and extended time is approximately 10 months.
Now the project further delays, and Engineer did not want to impose LDs to the Contractor, how the gap of 10 months can be removed??
1. We can include no additional event as all possible events have been included earlier
2. Can we increase EoT-1 by extending the time of already approved delaying events, if so, Would we able to justify such changing to Employer??
Sir, ur co-operation will be highly appreciated..
Dear Muhammad
I am not sure if I get you correctly. In general, the Engineer can correct his determination based on the actual facts and can’t fabricate determination as it will be a breach of his duties to the Employer.
We have s project with FIDIC 1999. please advice, if engineer not responding to contractor letters more than a week period and some cause the engineer response to contractor letters after a month period.what is the clauses for above issues.kindly give references from FIDIC.
dear Anwar
Please refer to clause 8.3. You should notify the Engineer of consequences of any delay in issuing instructions or responding to queries.
I am working for a Contractor on Design-Build Road Project with the condition of FIDIC 1995. I subcontracted the Design work of the project to a Design Firm and requested the Employer to approve my employment of the the Sub-Contractor. The Employer of the project neither approved nor rejected my request. No question about the qualifications of the designers. Shouldn’t the Employer respond?
Dear Ephraim
Clause 4.5 b of the FIDIC orange book requires the prior consent of the Employer if your designer/subcontractor was not named in the contract.
You may serve the Employer a notice of delay if such consent is not received within a reasonable time, then you make a claim accordingly.
Dear Samer,
We have the DREC conditions of contract on our project which is similar to FIDIC, the project comprises of 3 towers (residential/hotel/retail).
In the start of the project we had got a variation in Guniting thickness that we did for which we had done an oral notification for all the three buildings, the engineer approved the oral variation and as a matter of relation we did not give a written claim, accordingly while submitting the variation order the engineer outrighlty rejected saying that according to the contract you have to provide a notice.
Now we are in a loss of 1.5 million AED due to that , how to recover in such condition ?
Dear Shahzad
First, check reports, drawings, inspections and other project documents to see where the Engineer has issued such instruction or at least was aware and accepted the change in thickness. Perhaps, drawings may be the main document. You can prepare your claim accoridngly.
The alternative is to dispute the case based on “unjust enrichment” principle but you may need legal advice to prepare your claim. In my epxerience, the chance of success is pretty high in these cases.
dear Samer
please advise the steps and procedure that the client should be followed to redraw the performance bond from the contractor and how the contractor have to respond , in case he dont agree on that
Dear Raed
Pursuant to clause 10.3: “Prior to making a claim under the performance security the Employer shall, in every case, notify the Contractor stating the nature of the default in respect of which the claim is to be made.”
This is the only obligation on the Employer. It is so easy to liquidate uncondiational bonds. However, the Contractor may file urgent court case to stop the Employer action from cashing the bond but he needs legal advice.
Dear Sir
Whether The Engineer can ommit an ‘Item’ of the Works from the Work Scope. Because Clause 51.1 (b) of the Fidic 1987/1992 speaks about the Ommission of Work, not the Item ?
Your valuable advice is requested.
Regards
MF
Dear MF
Yes, he can ommit any work or item provided he does not give it to someone else. However, where the revised contract value becomes less than orignal value by more than 15%, the contractor will be eliglbe to claim for adjustment of his HO overheads pursuant to clause 52.3
If the FIDIC red book based contract was entered into between the parties and after a period of time, but before the end of the contract period, the parties have mutually agreed to terminate the contract and proceed with another form of contract.
Would a a mutual termination agreement suffice in terminating the first contract?
Dear Sandy
Yes, I believe mutual consent of authorised signatories is more than enough. I also refer you to an article published before in CMGUIDE which is relevent and interesting: http://cmguide.org/archives/20