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To: sam99@eim.ae
Date: Wed, 03 Dec 2008 12:07:17 +0400
Subject: Q&A - Contract Administration
Dear Professor,
I attended the Contract Administration Winter Sessions 2008. The 10 sessions were very useful
and your efforts to share the knowledge on Sound Contract Administration are invaluable. Thank
you for your kind words.
I have two questions,
Question 1: What is the most appropriate Standard Forms to administer Design and Supervision
Consultancy Contracts, where the Employer has appointed a Project Management Consultancy
to manage the processes in Design and Construction Stages? FIDIC Client/Consultant services
agreement could be used by adding appropriate new clauses to cover the Design/Supervision
Consultants obligations to comply with the Project Management Consultants instructions. The
provisions which deal with any of the Clients or Clients Representatives role which would be
assumed by the Project Management Consultant may also need appropriate modifications.
Question 2: Employer has appointed a Project Management Consultancy (Project Manager).
Project Manager refuses to monitor and control Health, Safety and Environment aspects claiming
that Contract Agreement does not include this scope. In Contracts documents it is mentioned that
Project Manager shall carry out the Services according to Best Industry Practices in International
Construction Industry. Could a Project Manager turn down monitor and control HSE aspects in
Construction stage? If there is a separate Supervision Consultant and in that contract if such
duties are stated, then PM would have a good case to argue that his contract does not include
those duties.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
Tilak Weerakoon
Senior Quantity Surveyor | Nakheel Shopping Malls | Nakheel Retail | Nakheel PJSC
Sir,
I need your advice on a very urgent and important matter. We are working on RTA
project as main contractor and we have one Nominated Subcontractor for
Landscape works. Now they submitted us claim for reinstatement of washed out
and contaminated sweet soil backfill on different locations of landscape works
due to heavy rainfall last week.
Please advice; are they eligible to ask this cost to us as per RTA CoC? In the
agreement between Main Contractor and Subcontractor there is no such clause is
mentioned.
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Best Regards!
Laeeq Hassan
----- Original Message ----From: Jinto Thomas Chirayath
To: sam99@eim.ae
Date: Thu, 04 Dec 2008 09:42:42 +0400
Subject: Contractual doubts
I was a student of winter batch (October-08). I would be grateful if you could clarify the
following.
In a FIDIC type contract there is a PS item for the Construction of changing rooms as its
drawings were not available at the time of Main Contract tendering. Later, after the Main
Contract has been awarded, the Employer tried to get quotations from different
subcontractors for this PS work, but failed to get. Hence the Employer approached the
Main Contractor to do this work. In this context, I would like to know,
Is there any obligation on part of the Main Contractor to submit an offer to the Employer,
if he insists, for this PS item (Construction of changing rooms)? No.
1. Is it possible for the Employer to instruct the main Contractor to do this PS item
as a variation using existing BOQ rates of Main Contract? Can be instructed under
58.2(a) and valued using contract rates and prices. (It is not a variation it is expenditure
of PS)
2. There was a 10% mark up over all PS items for the Main Contractor. If the main
Contractor accepts to do work as per existing BOQ rates, can he claim this 10%
over this BOQ rates? No.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
Jinto
Where the Contractor has not been instructed to expend the PS and/or the Contractor has not
completed all necessary approval process but has placed the orders, the Employer is not liable to
bear any costs.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
----- Original Message ----From: VATTIKUTI SATYANARAYANA
To: sam99@eim.ae
Date: Fri, 28 Nov 2008 19:52:50 +0530 (IST)
Subject: Sub-clause 10.3
Prof. Sam,
Could you please explain under what circumstances the Employer can claim under 10.3 and how
the Contractor can get back this money back. Wherever in the contract it states (or where it can
be inferred) that the Contractor should bear a cost incurred by the Employer, or that the Employer
can recover an amount as a debt due from the Contractor, or that the Contractor should pay any
sum to the Employer etc., and the monies due or becoming due to the Contractor is insufficient to
make that recovery, then one of the remedies available to the Employer is pursuant to SubClause 10.3
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Satyanarayana
Africon
----- Original Message ----From: Nicolas Mendoza Manalo
To: sam99@eim.ae
Date: Fri, 28 Nov 2008 12:21:41 +0400
Subject: querry
Hi Dr. Sam,
Follow up question regarding Head Office Overhead. During ''tendering stage'', why
the Head Office Overhead is not to be incorporated in Preliminary costs? There is no hard and
fast rule about this. Some contractors do indeed show the H.O. as a lump sum amount under
method related charges in the General Items (Preliminaries) bill. Majority of the Contractors
however spread this amount over the whole or part of the work items throughout the BOQ.
Is the head office overhead can only be claimed whenever the project will subject for prolongation
cost due to time extension? Recovery of H.O. can be claimed by the Contractor for the period of
EOT. Under-Recovery of H.O. can be claimed by the Contractor or Over-Recovery of H.O. can be
claimed by the Employer pursuant to 52.2 (a) or (b) when variations/varied work of omissions or
additions are instructed, and also pursuant to 52.3 when the difference between the ECP and
EFA are beyond plus or minus 15%.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Sir,
One of the clauses says the rates and prices used to calculate the contract
sum (and included within the BOQ ) shall be fixed for the duration of the
contract.
Now My Question :
1) does that mean we have to use the rates till the end of the
project even if it gets delayed beyond the scheduled completion
date I am afraid that is how the Employers lawyer would argue
or
2) Does that mean the end of DLP This is how a Contractors lawyer
would present to the court if the matter is taken to the courts for an
interpretation of the expression duration of the contract
The party who comes up with better arguments would eventually win the
case. This is what happens when clarification of ambiguous terms like
duration of the contract are not clarified at the tender stage.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
date the contractor can claim cost of any additional resources required and/or longer time
input (after normal hours or on holidays etc.) of existing resources, air-freighting, loss of
productivity due to congestion, rapid-setting additives to concrete, pre-casting instead of
in-situ etc. as acceleration costs.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
many thanks
Charles Vince
Dear Sir,
I was a student of Sound Contract Administration course July 2008. I have some query in
currently involved project.
Our procument route is Design and Build. I am working under the contractor. Our
design is divided to 4 stages mainly which named as DCP1,DCP2,DCP3 and DCP4
(DCP- Design Control Point)
DCP1-Preliminary engineering stage - key design element begun to appear, specification
out line completed
DCP2-In process stage- Approximately 66% level of total design completed
DCP3- Pre final stage- Approximately 85% level of total design completed
DCP4- Final stage- 100% completed
DCP1 stage is not tender drawing stage. DCP1 is done by the contractor by developing
tender stage to some extent.
The Engineer is in a position that we have to do omissions from DCP2 stage (Not from
tender drawings) when we do the variations. His argument is that client pays for Design
and Development to upgrade all things up to DCP2. Anyway, I couldnt find and
document which mentioned Design and development is finished from DCP2 stage.
Actually, on the view of contractor, it is suffered more due to missing most of items from
tender stage to DCP2 level. Can you advise me whether it is possible in Design & Build
type of contact to happen?
Your company should obtain the services of a claims expert to study all the
circumstances and provide you the specific advice.
Generally, in a Design & Build contract (unless there are provisions to the contrary) what
can be instructed as variations are:-
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Dear Sir,
We have one Contract where there is no clause similar to 52.3 is existing (not deleted).
The Engineer has omitted part of the Works. In this context:
1. Can we claim overhead and loss of profit relevant to the omitted part of the Work upon
receiving of the Engineer's instruction? Check preamble to the BOQ and all other
documents, and if nowhere it says that you are not entitled to OH & P on omitted work,
then you can claim them as damages for breach of contract for prevention by the
Employer to let you complete the whole of the Works. If however, the Employer omits
part of the Works because he does not have funds, then we have to wait and see how a
local court would decide on your entitlement. A genuine under-recovery of H.O. you are
likely to win. Profit, you may not.
2. Is there any clause in UAE law substantiate such claim? Prevention principle is
recognized by many legal systems. Consult a lawyer.
Regards,
Prof. Sam.
Regards
Tenny Isaac
----- Original Message ----From: Bharadwaj M P
To: sam99@eim.ae
Date: Wed, 19 Nov 2008 08:16:30 +0400
Subject: Doubts on yesterdays session
Good Morning Sir,
Yesterday I attended your lecture and it was wonderful and so fruitful to me. I have some doubts
and I am scribbling it below:
1.) In the first page, 11th line of the course material, it is saying that usage of the term Contract
Amendment is wrong. Suppose the employer wishes to change the program clause or add/r
amend any part of the clause/portion of the conditions of contract, what shall we do? And how we
can call it as instead of Contract Amendment? The Engineer cannot instruct Contract
Amendments. The Contractor and the Employer can sign an amendment to the contract.
2.) Is it mandatory according to FIDIC that Contractor shall do the varied works, even if the rates
are not fixed? If the variation is necessary or appropriate, then the Contractor has an obligation
to comply.
My previous experience was with a contractor, their, considering the issued construction drawing
as an instruction we were notifying the Engineer about the cost and time implication of the same.
Engineer will give a written confirmation that we can proceed with the work and the cost shall be
analyzed and settled with their project management consultants. If such specific procedures are
written in the project management procedures which form part of the contract documents then the
parties are bound by them.
3.) When we can use or apply the rates of schedule of rates in valuation of varied works?
Generally always.
In some lumpsum BOQs, there are schedule of rates along with the daywork schedule. What is
the basic purpose of it, we were used to fill those with 3 or 4 times of its actual cost. Daywork
rates are used only to value dayworks (unless the contrary is stated in the contract such as in
DM/RTA where it is stated that the daywork rates would be used to value variations.)
4.) Consider a re-measurable contract, suppose layout drawing, specification and BOQ are the
only documents available. If the shape or orientation of some foundations is changed during
execution of the project, is it a varied work? Yes.
5.) What is the relevance of Clause 52.3 in a re-measured contract, as I stated above (E.g.
DEWA tenders)? The answer would require a 150 page explanation or a 3 hour demonstration.
You sent this email after attending only the first session. Since you have now completed the full
course, now you know what 52.3 is all about.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Bharadwaj M.P.
----- Original Message ----From: "A.G. Sasikumar"
To: sam99@eim.ae
Date: Wed, 19 Nov 2008 08:04:28 +0400 (GST)
Subject: Question on Contract Administration
Dear sir,
Thank you very much Prof. Sam for giving us your
valuable comments on contractual matters.
We have subcontractors nominated by the Engineer. The Employer/ Engineer
invited the bid for subcontract based on Fidic fourth edition 1987
reprinted in 1992 Conditions, which are same for the Contract with the
Contractor and the Employer (main Contract). With this we are finding
difficulties, because the clauses are not suitable for the sub-Contract.
Can we use the Fidic Conditions of Subcontract without incorporating in
the Contract specifically? or otherwise how to deal it? In order to use FIDIC 4th as a subcontract ,
very extensive amendments are required to practically all the clauses. Try to get the
subcontractors agreement to use FIDIC 1994 Subcontract conditions.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
A.G.Sasikumar
Shapoorji Pallonji Mideast LLC
----- Original Message ----From: nalin sanjaya de silva
To: sam99@eim.ae
Date: Tue, 18 Nov 2008 19:20:27 +0000 (GMT)
Subject: Re: Q&A
Sir,
Its a great pleasure to have an opportunity to write to you. this is nothing to clarify , but just to give
a drop of admiration regarding the enormous work you have been doing till now for me and to the
public as well.
Thanks very much again for the great help by sending these and keeping in touch with us as a
great guardian for us. Blessings for long life and good health.
Best regards,
Nalin.
MEP QS, The Dubai Mall Project.
Thank you for your kind words.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
If the Contractor signed the contract documents without reading them, it is too late now to
challenge them. Employer is entitled to have the saving.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Kind regards
Ashlyn
----- Original Message ----From: spriyankara
To: sam99@eim.ae
Date: Tue, 18 Nov 2008 09:29:53 +0400
Subject: Q & A (Dayworks)
Dear sir,
My Question as follows
Dayworks have been signed by engineer for rectification of valve (installed
by same contractor & Damaged by other). Same Organizations Quantity
Surveyor rejected that stating it is contractors responsible to protection
of the Works until handover to Client and it is included in Contractors
insurance.
Please explain me, is this statement correct or not? First you have to check the provisions in the
contract to find out whether the Contractor has an obligation to protect the valve whilst the others
are also working on or near the valve. Next you have to check the insurance policy to find out
whether it covers such damages/repair costs arising from Contractors failure to provide such
protection. Thereafter you will have the right answer as to whether the Contractor should bear the
cost or claim from insurance or from Employer, notwithstanding the Engineer signing the Daywork
Sheets.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Best Regards
Shammi Edirisinghe
----- Original Message ----From: Suvarna Kudchadkar
To: sam99@eim.ae
Date: Wed, 03 Dec 2008 09:24:48 +0000
Subject: RE: Q&A
Prof. Sam,
In one of our project, we are faced with this issue regarding an item (water meter cabinet) which
was issued / added as a tender addendum.
Architectural drawings (plans), shows this item as Water meter cabinet but the door number is
not been designated as per the detail drawing (addendum issued).
The detail drawing indicated the size as (varies x 2200) & location as telephone & water
meter cabinets, but without the Quantities.
Though this item was issued as an addendum during the tender stage it wasnt added in
the BOQ which shows only 1 no. for water meter chamber (but this description says as
water meter chamber / cabinet.). The total no of water meter cabinets are more then
20.
Is the Main Contractor entitled for this variation claim? If the contract is a re-measurement
contract, the Contractor is entitled to claim for the actual quantity constructed multiplied by the
rate in the BOQ given for 1 nr.
If the contract is a lump sum contract and the tender addendum was properly incorporated as a
contract document, then the contractor is not entitled to any additional payment.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Quantity Surveyor and Registered Arbitrator / Expert
Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
regards
Suvarna Kudchadkar
Architect