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Jan08 Q&A 4

The document provides advice from Prof. Sam in response to various questions on construction contract administration issues. In response to one question, Prof. Sam explains that if a contractor can prove a specified product was unavailable or unsuitable, replacing it would constitute a variation making the contractor eligible for additional payment. In another response, Prof. Sam advises that a contractor can ask a subcontractor for a cost breakdown of items priced higher than average but the subcontractor has no obligation to provide a discount.

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63 views

Jan08 Q&A 4

The document provides advice from Prof. Sam in response to various questions on construction contract administration issues. In response to one question, Prof. Sam explains that if a contractor can prove a specified product was unavailable or unsuitable, replacing it would constitute a variation making the contractor eligible for additional payment. In another response, Prof. Sam advises that a contractor can ask a subcontractor for a cost breakdown of items priced higher than average but the subcontractor has no obligation to provide a discount.

Uploaded by

pdkprabhath_66619207
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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My comments are given in red below :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

From: Aruna Perera [mailto:[email protected]]


Sent: 03 March 2008 17:12
To: 'Dr. Sam'
Subject: Advice sought: From Aruna

Dear Prof. Sam,


Can you please advice me on the following two cases;
1. An Enabling Works Contractor is having difficulties in obtaining concrete in time
due cement shortages in the market. It has been established that he has taken
reasonable measures to find/order from alternative suppliers.
1.a)
Can EOT be granted under special circumstances (44.1.e)? No. Because
supply of material is an obligation of the Contractor and failure to supply is a breach.
A shortage does not make it a physical impossibility to supply. Also a shortage in one
market does not mean that it is in shortage elsewhere.
1.b)
Can the Contractor be paid for his costs (idle plant and labour)? Not
applicable.
2. A Contractor is in delay due to a suspension order given and a redesign that has
taken place, which effectively has taken past the original completion date.
2.a)
Contractor now claims for escalation of prices especially for concrete and
steel. Believe this come under his claim for the EOT. Is there any other vehicle that
we
can
look
into
this
hike?
If C can prove (without any discrepancy or ambiguity) that the exact wording in the
Contract establishes a definite cut-off date upto which his rates/prices were required
to be fixed, and that it was physically impossible for C to procure because of lack of
design information, then C would have a good case. But if Employer can prove that
C should have procured using advance payment to hedge against price fluctions
and/or that sufficient information was available to C to procure in advance and get
paid as materials-on-site, then C's claim would fail.
Best regards,

Aruna Perera
----- Original Message ----From: Wael Guirges Tawfik
To: [email protected]
Date: Thu, 06 Mar 2008 13:01:51 +0400
Subject: Questions

Dear Prof. Sam,


Really many thanks for your continuous support to us with all advices and answers on our
questions.
Please I have two questions and I am looking for your valuable reply:
Q1- Under which clause in re-measured form of contracts (FIDIC) we must order the additional
works to be done on dayworks basis? Under 52.4 And under which clause is the adjustment of
these works? If there is a valuation/payment procedure stated in a separate Daywork Schedule,
then according to that, otherwise according to 52.4.
Q2- We have a PS item in a re-measured Contract and we (the Employer) want to execute it after
the completion of works of the main Contractor.
The Contractor already put his over head & profit as a % in the BOQ when he priced the Contract
and he will be paid it, but will the Contractor be entitled for additional prolongation costs as the
works are extended for some months due to Employer instruction, if yes will it be actual costs
only? C is entitled to prolongation costs. C is entitled to the OH&P % as setout in the Contract
and additionally to prolongation costs based on actual costs incurred. However there should be
an adjustment for any duplicated Head Office Overheads as it falls outside the scope of 52.3.
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

Many thanks,
----- Original Message ----From: Ashlyn Almeida
To: " Prof. Sam " <[email protected]>
Date: Wed, 05 Mar 2008 17:16:13 +0400
Subject: Re: Summer 2007 Q&A
Dear Dr Sam
Your Q&A session is proving to be quite valuable. Thank you for the effort.
In a recently signed contract the contractor needed to comply with 110 V for construction work in force in a
JAFZA area which has become regulation. Normal requirement on a DM site being 220V. The contract does
state that the contractor must comply with local regulations etc. During the tender clarification we asked the
contractor to confirm if he would comply with JAFZA Health safety document which clearly spells out this
requirement. He gave a letter confirming compliance not realizing this was a requirement.

Now post award he insists for a variation. Is it a variation ? If the 110V requirement was an existing JAFZA
requirement prior to the tender was submitted and if the tender documents clearly required C to comply with
JAFZA requirements, then it is not a Variation. Otherwise it is a Variation. Also if the area was previously
under DM jurisdiction and later (i.e.after the Tender), came under JAFZA jurisdiction, then it is a variation.
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
Ashlyn

-----Original Message----From: Kuruvilla [mailto:[email protected]]


Sent: 28 February 2008 18:16
To: [email protected]
Subject:
Dear Prof. Sam,
During the construction the Contractor raises objection against use of a particular product
specified in the Contract and has supported his case with sufficient documents.
The Engineer requested the Contractor to propose an alternative.
Is the Contractor eligible for a variation? Can the engineer reject it on the basis that the
Contractor should have notified it During the tender. If C supported his case to prove that the
product was something that, either was not physically available or should not have been specified
due to any other valid reason, then it is a variation.
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

----- Original Message ----From: Thufail Ahmed Abdul Matheen


To: [email protected]
Date: Thu, 28 Feb 2008 12:36:56 +0400
Subject: RE: Dear Class of Autumn 2007

Hello Professor,
My name is Ahmed, working in one of the leading interior fit-out company in Dubai. Sir, I have a
question, request you to kindly resolve this issue mentioned below.

During the awarding of contract to one of our subcontractor, the rates of certain items were not
scrutinized by our QS due to lack of time. Now after completing the project when I observed these
rates, they are very high when compared with average rates. The contract is re-measurable &
having Back to Back term. Kindly advise if,
1. I can ask him to provide me a break down of these items. Yes, if you need to use them as a
basis for valuing variations.
2. Ask him for discount in these items. Yes you can ask, but he does not have an obligation

to give you a discount.


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

0r as you may advise. Awaiting for your response.


Thanking you,
Thanks & Regards,
T.Ahmed.
(Project Engineer)

----- Original Message ----From: [email protected]


To: [email protected]
Date: Wed, 27 Feb 2008 14:52:08 +0400
Subject: Re: Jan08-Q&A-4
Dear Dr. Sam,
Kindly clarify the following
If the Contractor has put up his interim payment application with Claims and in the first
instance the Consultant in due consultation from the Client has approved and certified the
Claim in the interim application after requesting for necessary substantiation from the
contractor.
The Client withheld the payment certificate for 60 days and has now re-cetified ( by the
Consultatnt ?) the payment application deleting the entire Claim put forth by the
Contractor which was originally approved.
Where does the Contractor stand in this case ? C
If the Consultant, later found that his previous certification is incorrect, he can later
correct it.

If you are capable of proving your entitlement, then you should pursue the dispute
resolution mechanism in the contract.
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

Nafeesa Sayad
Senior Quantity Surveyor

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