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Ranjan,
My comments are given below in red :----- Original Message ----From: ranjan dommaniga "ranjan1967@hotmail.com"
To: sam99@eim.ae
Date: 12:06 AM
Subject: Clause 57.2
On the other hand, if an item for monthly progress photographs is priced in the
BOQ, but not described in Drawings/Spec. etc., then the Contractor has an
obligation to provide photographs and the Engineer can omit the item as a
variation, if necessary/appropriate and deduct it from the lump sum price.
b). Are the contract Drawings & Specification only documents to decide the scope of
work? No.
Clause 5.2 : The several documents forming the Contract are to be taken as mutually explanatory of one
another,
c). BOQ is just an indicative tool in a lump sum contract. Is it correct? Yes, except in
circumstances such as the example of photographs stated in (a) above. Also the
rates/prices may become applicable in some instances though the items and
quantities may not.
d). If an item mistakenly included in a contract BOQ (not anywhere else in the
Contract), does it represent the contractors scope? No. Contractor should be paid
the lump sum price without deducting such item.
2. An item which is to be compliance with authority requirement was excluded from
the Contractors offer and the same has been included in the Contract drawings. (My
comments below assume that the exclusion has been accepted by the Employer
and carried to the Contract.)
a). In accordance with the Sub-Clause 26.1 of the Conditions of Contract, the
Contractor shall comply with authorities requirements. Does the Contractor is
having right to request variation to execute the item as stated above? If the
exclusion is very clear that this is the requirement excluded, then yes, a variation is
required to restore the obligation to comply with authority requirements.
b). Should he execute the such work without variation? (addition) No. He could
claim that the contract is frustrated if the Engineer does not issue the necessary
instruction for the variation, as he is unable to progress the work without complying
with authority requirements.
c) The Contractor claims that the Contractor should comply with authorities
requirements only as a variation . Is there any possibility to interpret the Sub-Clause
26.1 as claimed? No, unless the wording in the original exclusion is ambiguous. If
the wording is clear, then the Engineer is duty bound to instruct the variation which
is NECESSARY for the Works to proceed.
Regards,
Dr. Sam.
Hi Dr. Sam,
for all work done including variations. Both parties end up paying more, if the Target Cost is exceeded but would
share the savings if the opposite is the case.
How would you differentiate it from the more familiar types of contract such as Lump
Sum Fixed Price Contract, etc? These are Employer favoured Contracts which put the Contractor on the
deffensive, whereas Target Cost contracts aim at a common goal.
Could you please recommend any reference books dealing with this type of contract? I am afraid I do not have any
information at present. Time permitting I shall try to find out and let you know. If anyone of the "Class of Summer
2007" has a reference please circulate using "reply all" function.
Regards,
Dr. Sam.
Thanks for your invitation for the certificate ceremony.. i will do my best to be there. Your certificate is
with me and can be collected at any time.
If it is convenient for your good self, i would like to seek your advice on the following:
The same Main Contractor is to be awarded on the Provisional Sum ("PS") items that are already in his
BOQ. Does he has the right to increase the bid amount of that item? Moreover, is he free to break up this
Provisional Sum value the way he wishes? By the phrase "bid amount of that item", are you refering to
the OH&P mark-up and attendance etc. priced by him against the related items such as OH&P and
Attendance given below the PS item? These items are applicable only if the work under the PS is awarded
to a nominated subcontractor.
Where the work under the PS is awarded to the Contractor himself, the value thereof is determined in
accordance with Clause 52 (if FIDIC) in the same manner that a variation is valued. Therefore, the value
of the work can be either higher or lower than the PS. Therefore, the Contractor can ask for re-rating if the
existing rates are inapplicable or inappropriate as we discussed in detail during the first session of the
training course.
Regards,
Dr. Sam.
Dear Sir,
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At the outset I thank you very much for the invaluable lectures on Sound
contract management in which I was one of the attendees. I have
suggested few of my colleagues to enroll for the forthcoming
sessions. Thank you.
My questions are :
Thank You
S Chandra Mohan
QUESTIONS TO Dr.SAM
1. Is there any time frame to issue to EOT. Yes, as we discussed during the 2nd session, it
can be inferred from Sub-Clause 44.3 (i.e. before the Contractor submits the next set
of interim particulars in 28 days)
2. In a Project, Employer/Engineer initially nominates a supplier to the main contractor.
The Supplier assures to deliver the material in 60 days duration but unfortunately the
shipment which carries the material could not able to reach in time and supplier fails
as a result main contractor suffers the delay. The main contractor notifies the
engineer & employer about the failure of the supplier. In this case who is responsible
for the delay? Pursuant to Sub-Clause 59.1 nominated suppliers are deemed to be
subcontractors to the Contactor. Pursuant to Sub-Clause 4.1, the Contractor is
responsible for the acts and defaults of all such subcontractors.
3. What are the parameters the rate priced by the contractor should include. Too
general for a short answer. All Contractors costs, risks, overheads and profit.
4. Is there any limitation in fixing the Liquidated Damages %. Yes, it should be a preestimate of the Employers future losses foreseeable at the time of entering into the
contract.
5. What is the basic Qualification to become an arbitrator. Thorough academic
education/knowledge in the practice and procedure of international arbitration and
law related thereto, plus a minimum of 4 years pupilage to a registered arbitrator.
6. Highlight us the major changes between FIDIC 1992 & 1999. Perhaps in another 20
session training programme.
7. For the Extended period of works, whether the main contractor has to extend the
insurance, performance bond etc. related to the project. If yes can he claim for the
additional premium paid. Insurance Yes. PB at Employers discretion.
Reimbursement yes.
8. In a project main contractor is taking care of the CAR policy for the full project
amount. Shoring contractor fails to extend the insurance cover for his works. In case
of failures, who will be held responsible. Can the CAR policy take care of the shoring
failure as it is covered for whole project cost. Yes, the Main contractor should procure
a policy covering all work of subcontractors.
9. Which method of delay analysis is considered as more accurate. If the necessity is to
verify whether or not the project could have been completed on the originally
scheduled date for completion, then the Impacted As-Planned method. During a
concurrent delay situation this is a necessity.
10. The 52.3 clause is deleted in the contract. In that case how will variations exceeding
15% be handled. Every single Dhiram H.O. over-recovery should be deducted from
the final account in favour of the Employer. Every single Dhiram H.O. under-recovery
should be restored in favour of the Contractor. To avoid this nightmare Sub-Clause
52.3 has been provided.
11. In a contract, the employer plans to remove the AC work from the Main contractors
scope & plans to give it to a third party. Main Contractor says its upto his domestic
subcontractor to decide. If he agrees what are his eligible claims. Can this be treated
as a variation? Yes, as an omission under 51.1(b) and after compensating the
Contractor for his losses.
12.In one of our contracts, clause 70 is deleted & the following is added.
70(1) No adjustment to the contract price shall be made in respect of any increase
or decrease in t5he cost to the contractor of employing labour or staff in the
execution of works which may take place subsequent to the date of tender
70(2) No adjustment to the contract price shall be made in respect of any decrease
or increase in the cost to the contractor of goods & materials (whether for permanent
or temporary works), consumable stores or plant or in the cost to the contractor of
ocean or air freight and other associated charges which may take place subsequent
to the date of tender.
In this case is the contractor eligible for inflation in costs.
Advice to companies cannot be provided. This is an exclusive forum for alumni of the
Sound Contract Administration course. Questions should be limited to those of
academic interest or related to those discussed during the course.
N.B.
Questions should be brief (not long lists) and specific (not generic).