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‡ Measurement and Evaluation

‡ Variations and Adjustments

‡ Contract Price and Payments

 

  

‡ Lump Sum

‡ Re-measurement

‡ Cost reimbursement
 
‡ Scope of the work and the amount is well
defined.

‡ Contractor agrees to work for a pre-determined

lump sum.
 

tem Description Unit Qty Rate Amount

Nr.
 


 ! 

 
 Cost commitment is 
ime required for
known at the outset producing full scope

 Relatively easy  Changes difficult and

contractor selection potentially costly

 ully defined scope

 Contractor assumes
greatest risks
 ð "   

‡
he scope of the work is generally well defined
but the amount of work is indefinite.

‡ Sufficiently detailed scope of work to allow

contractor to calculate unit rates.
   

tem Description Unit Qty Rate Amount

Nr.
   


 ! 

 
‡ Scope need not be as ‡ inal cost not clearly
accurate known

‡ Cost per unit of

production
predetermined

‡ lexibility- scope &

quantity can be
varied.
  ð # 

‡ Contractor is paid all what he spends plus OH & Profit.

‡ Minimal pre-determined scope definition.

‡ Clear and explicit definition of what constitutes

reimbursable costs.

‡ Co-operative atmosphere and a competent and

trustworthy contractor.

‡ Close audit and quality supervision and direction by the

Client.
  ð # 


]tem Schedule Rate Unit

Nr.
  ð # 



 ! 

 
‡ Useful when the ‡ inal cost unknown
scope cannot be
specified in advance ‡ Buyer retains risk

‡ Minimal pre- ‡ Reduces ability to

determined scope compare contractor¶s
definition permits bids
early start
 
  



15 sub clauses relate to this vital sector

‡ Sub Clause 14.1  Contract Price may be

represented through Bill of Quantities (re-
measured) or Schedules

‡ Sub Clause 14.2  Anticipates that advance

payment will be made and procedures provided
   




$ %

%&

‡ Measurements is undertaken by the Engineer,

giving notice to the Contractor¶s Representative
to attend etc.

‡ Measurement shall be net actual quantities

 
#


$ %

%&
ëub Clause 12.3 Provides the basis for the Engineer to
determine the value of each item of work
‡
he rates specified in the Contract will apply unless
there are no appropriate rates for a new item of
work

‡ New Rates may be determined where items a) and

b) of Sub Clause 12.3 apply

‡ Sub Clause 12.4 provides for possible

compensation to Contractor relating to omissions
of work
 — 

 ]ncreasing, decreasing or omitting any

part of the contract work

 Changing the character or quality of

material or work

 Changing the source of subcontract

work
 — 



'

$ &
‡ Engineer has right to vary under Sub Clause
13.1 and with details of types of issues covered

‡ Opportunity for Contractor to submit ³Value

Engineering´ change. Risk of development with
Contractor and any savings are split 50:50

‡ Sub Clause 13.3 sets out procedure required to

be followed if Engineer requests proposal prior
to instructing Variation
 ! 
( ))

‡ Engineer decides that a variation is desirable

‡ Contractor is instructed to assess

‡ Contractor submits proposals

‡ Engineer decides whether to proceed

‡ ]f Engineer proceeds negotiation occurs

‡ Engineer issues formal change order

‡ Contractor proceeds with work

  
$ %*&

]nclude the provisional sum of Prov. Sum 120 00

Dhr. 120 (one hundred and
twenty Dirhams) for connecting
end of drain to be the soakage
pit.
    

]nclude the prime cost sum of PC Sum 800 00

Dhr. 800 (eight hundred
Dirhams) for patent partitions to
be executed by nominated sub-
contractors.

Add for profit %

General attendance ]tem

    $

+&

]nclude the prime cost sum of PC Sum 55 00

Dhr. 55 (fifty-five Dirhams) for
ironmongery to be supplied by
nominated supplier.

Add for profit %

Adjustment of PC & Provisional Sums
Omissions Additions

Prime cost sum for patent partitions A


A

Add for profit (10%)


General attendance

Emirates ]nterior Ltd., A/C No. 2134 A

A

Profit (10%)


General attendance

otal 1000.00  

Less omission 



Net addition C/ to Grand Summary
 !( ,$ %-&

Day-work means payment for actual hours

spent carrying out an operation as against
payments made based on prices given in the
tender.
 !( ,ð  


he minimum information recorded should

include:
 Hours worked by those engaged in daywork

 Hours machines were hired

 Material used by the Contractor for daywork

purposes
 â) .
!( ,/

‡ Daywork is only carried out in special situations.

‡ Engineer will usually only request daywork in an

emergency when there is insufficient time to raise a
variation quotation request.
he same emergency may
give the Contractor insufficient time to assess and cost
a variation quotation.

‡ Another instance would be where tradesmen for a

particular trade has to be brought back to do work in
that trade when the work in that trade is completed.
   |
$ %0&
‡ Often construction projects, particularly, large
projects are undertaken over a long period of time.
]t is more than likely that the price of material used
in a job and the rates of pay of the workmen will
increase and even in some instances fall during
the life of the contract.

‡ Rise and all is the adjustment made to the

contract price to offset or compensate for any rises
and falls that occur during the period of contract.

'
1 )

 
‡ Extensive details provided for the use of
formulae for cost variations during the contract
period. Optional, determined by employer prior
to
ender

‡ Base rate reference is 28 days prior to date of

tender submission

‡ actors provided in Appendix to
ender for each

project
 
 )


 Payment on completion

 Stage payments

 Progress payments
   


‡
he value of progress payments are determined on

the actual value of work done

‡
his method is based on actual measurement of

work done or value of percentages of work done
 
2 

$ %" %-&
'
 
  


‡ When progress payments are to be made.

‡
he method of presentation by the Contractor of his

claim for progress payments (the information to be
provided)

‡ Method for fixing the estimate of the contract value

of work executed including variations, unfixed
materials on site, etc.,
 2
  
$
%&

‡ Sub Clause 14.3  Contractor to submit a

Statement for application for interim payment.
Note cross reference to Sub Clause 4.21, plus
requirement for 6 copies.

‡ Sub Clause 14.6  Sets out procedure for issue

of interim Payment Certificate by the Engineer -
see also chart 2
 
$ %3%0&

‡ Sub Clause 14.7  Payment duties of Employers

plus under 14.8 the financial charges to be paid if
Employer is late in payment

(3% above discount rate of Central Bank of country

of the currency of payment)
 ð 

$ %%4&

‡ Security for client

‡ Sub Clause 14.9 refers to Retention Money

‡ On issuance of
aking Over Certificate, first half

certified for payment by Engineer

‡ On Expiry of Defects Notification Period, balance

certified for payment by Engineer
 |
 


Sub Clauses 14.10/14.11/14.12/14.13

‡
hese deal with the Statement on completion,
application for inal Payment Certificate,
discharge and issue of inal Payment Certificate

Sub Clause 14.15 Currencies of Payment

‡
his clause sets out the procedures if the
payments are to be made in more than one
currency
 |
 
$
%&

‡ Sub Clause 14.10 requires Contractors within

84 days of
aking Over Certificate too submit
a statement showing:
- Value of all work done
- urther sums considered due
- Estimate of any other amounts
considered due



)  1
 


 ( )
# %-
 |
 
$
%&
‡ Sub Clause 4.11 requires Contractor to submit
inal Statement within 56 days of receiving
Performance Certificate.

‡ Sub Clause 4.12 Contractor to submit written

discharge with inal Settlement.

‡ Sub clause 14.13 requires Engineer to issue

within 28 days inal payment Certificate.
 5   
Read Clauses 12, 13 & 14 of the Red Book and answer
following questions.

Yes No May
be
Does the Contractor undertake the measurement of
the Works in Red Book?
Should the method of measurement be stated in the
Bill of Quantities
Can the Engineer demand the Contractor to give the
breakdown of his rates?
 5   $
%&

Yes No May
be
Can the Daywork Schedule be used to agree
new rates
Can the Contract Price be fixed?

Can the Engineer correct previous payment

certificates?
Have Provisional Sums to be spent within the
contract?
 5   $6 &

A contract agreement was signed based on the ]D]C 1999

Red Book on 1st ebruary, with Commencement Date
stated as 1st March. On 4th April the Contractor submitted
an application for an interim payment.

On 18th April, the Engineer replied that he did not intend to

issue an ]nterim Payment Certificate.

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