Jun 10 QA-2

My comments are given in red below:-----Original Message----From: thirimadura ariyaratna [mailto:ariyaratnat@yahoo.
com]
Sent: Tuesday, August 24, 2010 5:16 PM
To: [email protected]
Subject: Questions and Answers
Dear Professor,
Thanks for the mails you have sent me regarding above subject matter and today, I have
few questions and I hope you will comment on same.
Note for the Adjustment Items as follow,
The Adjustment item, if any in the Tender Summary, shall apply to all items of Works,
excluding Provisional Sum unless clearly indicated otherwise. The Adjustment Item shall
not be a lump-Sum, but a percentage of the total tendered sum excluding Provisional
Sum or a percentage of the totals for the items indicated. The Adjustment Item shall be
applied to all applicable item rates and sums including any addenda. The Contract shall
be signed with the inclusion of the adjusted rates and sums. The adjusted rates and
sums shall be applied during measure and valuation of variations.
1) My question is, Adjustment Item is applicable only for the BOQ Rates? If not is it
applicable for the BOQ Rates and New Rates, please clarify. According to the above
wording, if a new rate is built-up using the exiting BOQ rates, then the Adjustment would
proportionately apply to such new rate. If however, the new rate is built-up from first
principles (i.e. without using the existing BOQ rates), then the Adjustment would not
apply.
2) Within the Contract Period or Time Extension Period if Contractor is doing any
Variations, as a Consultants we have to pay any additional amount for the Builders Work
( Electricity, Water, Shop Drawings etc.). But we have lump Sum amount in the prelims,
please clarify. Either the lump sum should be broken-down to its components and they
could be used to value those related to the variations or the Contractor could be
instructed to maintain separate records of additional elec/water/shop drawings used for
variations.
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder
Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668
Thanks and Best Regards,
T. Ariyaratna.
----- Original Message ----From: Chen Xin
Date: Tue, 24 Aug 2010 11:00:56 +0400
Subject: RE: Q&A
Hi Prof. Sam,
Warm thanks for all Q&A which are being received via emails.
Could you please comment on my previous question in respect of weekly programme as delay
notice via email dated 01 August 2010 below. See email below.
Furthermore, could you please shed some light on following definitions:- (if wrong, please kindly
correct me)
Practical Completion - which the Works were completed in accordance with the Contract,
except for only minor outstanding work remain, MEP Testing and Commissioning completed.
Therefore, the practical completion certificate to be issued by completion of MEP Testing and
Commissioning. Yes.
Substantial Completion - which not substantially affect the use of Works or section for their
intended purpose. Yes. Therefore, Substantial Completion Date normally is earlier than Practical
Completion Date. No. And both dates are earlier than the date of Time for Completion. No.
Both mean the same thing. Where no specific definition is given for them in a Contract, they
should be read together with other Clauses such as Defects Liability clauses. If provisions similar
to 49.2(a) (FIDIC-4th) exist, then the taking-over of the Works and issuing Taking-Over Certificate
cannot be delayed whilst not only minor defects but also minor outstanding work are still pending
which would not prevent the Employer to put the project to its intended use. If however the
wording in a contract is specific to mean the Defects Liability Period to be only for latent defects,
then completion (or practical/substantial completion) is not achieved if there are any patent
defects or outstanding minor work.
Regards,
Prof. Sam.

Await your early and favorable responses.

Thanks and Regards,
Chen Xin
Senior Quantity Surveyor

Al Habtoor ISG
----- Original Message ----From: Chen Xin
Date: Sun, 01 Aug 2010 13:03:55 +0400
Subject: RE: Q&A
Prof. Sam,
Please accept my heartfelt thanks for your valuable continued service to the Industry
and to your Students, specially for your intention to extend your knowledge to us
through this Q & A.
Please could you comment whether a weekly program which identified delaying
events is adequate notice in accordance with Clause 44. It is unlikely that an
Arbitrator or the Courts would consider such a document to be a formal notice. As we
discussed during the 4th Session, a Notice is a specially written document with
specific contents and served in a specific manner. However, if the Clause is not
drafted in a manner to make the notice condition precedent, then there is no worry
because the Contractor does not lose his entitlement to EOT.
Regards,
Prof. Sam.

Your early and favourable response would be appreciated.

Chen Xin
----- Original Message ----From: Nabil H

Date: Mon, 23 Aug 2010 12:23:02 +0400
Subject: RE: Contract Administration (FIDIC) Training - Final Call
Hi Dr. Sam,
Thanks for the continued updates with the Q&A's.
I'd like to ask a question if i may.
We are using FIDIC 1999 on our project with the Main Contractor. We (the client) have specifically requested
from the main contractor in the general requirements to use a proprietry document management system to
the approval of the engineer. The Main contractor has refused/decided to not provide this for the project and
instead is using their own standard form of document control for the project.
As the Client, are we entitled to deduct the value of the proprietry document management system from his
prelims if he has not provided this to the project?

If so, since there is no specific value in the BOQ for this item, how would you value this deduction?
If there is no re-measurable item for this in the BOQ (either in the Preliminaries Bill or elsewhere) then there
is a difficulty to deduct payments if the Contractor would still complete the Works using another system.
However, since there appears to be a breach (on the part of the Contractor for not discharging his obligation
to use the specified system), if the Employer can demonstrate that he/his consultants would make a loss or
incur unforeseen expenses, then it is likely that he would be successful in a claim for damages to
compensate such loss/expenses.
Regards,
Prof. Sam.

Thanks for your time
----- Original Message ----From: Mufeez Lebbe

To: "[email protected]" <[email protected]>
Date: Sun, 15 Aug 2010 16:25:49 +0400
Subject: Re: Contract Administration (FIDIC) Training - Final Call
Dear Prof. Sam,
Thanks for the email. I have forwarded this email to my colleagues in my company (Pivot
Engineering LLC, Abu Dhabi). One or two are thinking of joining this season.
Further to all your Q&A emails, I thank you very much for your valuable service, Sir. I would like
to ask the following question with reference to FIDIC 1999 Conditions of Contract.
QUESTION:
Clause 18.2.d (Insurance for Works & Contractors equipment, FIDIC

1999) states that if an amount is not so stated in the Appendix to
tender this clause 18.2(d) shall not apply. In such case:
1.
If no amount is stated, can the Employers risks be deemed to be covered
under a separate insurance by the Employer itself YES and Contractor eligible to claim
under clauses 19.4 & 20.1 in the eventuality? Under 20.1, yes.
2.
If the appendix does state an amount (deductible), then will this be paid by the
Employer in an insurance claim event? See 1 above.
3.
Regards,
If the appendix state Not applicable or Nil, would the clause 18.2.d be
deemed applicable or not? If it says Nil then the amount is zero and therefore
18.2.d. is applicable.
Prof. Sam.

Looking forward your comments on my queries above, Professor.

Regards,
Mufeez Lebb
----- Original Message ----From: john son
To: prof sam <[email protected]>
Date: Sat, 07 Aug 2010 17:55:11 +0530 (IST)
Subject: Contracts quary
Dear Prof,
Well and wish you the same. I'm April batch SCA alumini. In one of my project, we had fire accident last
month. The project is warehouse and 95% of work is completed and fire broke out inside where we kept
electrical cable and plumbing material. Fire damaged the ceiling of the building in one grid and soot is
deposited in many areas. The Engineer stoped the payment, telling that we have to rectify this and also the
claimed area is damaged. So untill you rectify this we will not release the payment certificate even for other
areas. Please tell me whether it correct contractually? Please tell me is there any clause is there to hold our
payment.
Expecting your reply.
If the Contract is similar to FIDIC 4th, then the Contractor should have insured the Works in the joint
names of the Employer and the Contractor against damages of this nature and therefore either of them can
claim the costs of repairs etc. and there is no reason why the Contractors payments should be stopped.
If however, the Contractor failed to discharge his obligation of insuring and as a consequence, the Employer
is now unable to recover any additional repair cost then it is understandable that he would be expecting
repairs at no extra cost and thus hold payments for the damaged area until repaired. For other areas
payments should be released.
Regards,
Prof. Sam.

Thanks & Regards,

PRINCE JOHNSON.R.
P.O BOX. 83550,
DUBAI, UAE.
Mobile: (00971)050 9518430
Phone: (00971) 042807242

----- Original Message ----From: Leopoldo Robles
Date: Sun, 01 Aug 2010 13:07:51 +0200
Subject: Clarification (Aug.2010)
Dear Dr. Sam,

Could you please give your valuable response on my clarification below;
Type of Contract: Re-measurable
We are currently preparing/dealing with one of Government road project, and was
advised by the Employers Representative that BOQ should be prepared based on
CESSM format. However, he wanted that the rates to be inserted by the Tenderers for a
certain work items shall be in inclusive of finish product.
E.g. Concreting works, as per CESSM, we have to separate the rate per item such
rebars, shuttering etc. Simply, they dont want to have a detail breakdown or itemized
payments of work.
In the BOQ Preamble, we are considering to state/include a statement that will cover the
abovementioned Employers requirement.
My question is/are follows;
1. Is it a correct practice? Noting that CESSM format is to be applied but the rule
will be overlook in this situation. You can depart from the rules provided that you
clearly state in the Preamble about such departure.
Considering a variation that might occur, in my opinion, the rate breakdown for
any certain item of works will be difficult to assess since rate is full inclusive of
work to be done. Yes. The whole purpose of using CESMM3 (as discussed
during the 8th Session) is lost as the rates would become inapplicable to value
variations.
2. In the event this scenario proceeds, during tender stage, can we request the
tenderers to substantiate their pricing methodology? Yes. Better to include
provisions for this in the Instructions to tenderers.
Regards,
Prof. Sam.


Regards,
L. Robles
----- Original Message ----From: Roselma Martinez
Date: Wed, 21 Jul 2010 15:36:49 +0400
Subject: RE: Q&A
Sir,
Im a bit confused regarding variation claims on a Lump Sum Contract.
There are items shown on Contract Drawing but there is no detail or specification. For example the Contract
Drawing (Elevation of the Whole Building) it was cut on the section showing canopy but there is no detail or
specification pertaining to canopy. The contractor issue RFI to consultant asking for the details of the
canopy. Can the contractor claim the canopy as a variation? Another example, there is a box type with door
showing in the floor plan (it is not clearly identified what is that item). The contractor again issue RFI to
consultant asking for the details of box type that looks like a lift. The consultant issued a response and
provided the specification for platform lift. Can the contractor claim the additional platform lift as a variation
since there is no specification and details provided during Tender Stage? Can the contractor use as a basis
of his claim the precedence of documents?
Since it is a Lump Sum Contract, the tenderer should have ideally ring-fenced the scope of work properly at
the time of tendering (raised the queries at that time not now !). If this was not done then he has to now
demonstrate with acceptable proof what he assumed that canopy/box to be, for the purpose of pricing the
tender and in no way an experienced contractor could have assumed them to be any other. If the contractor
can produce such proof, then anything other than that instructed by the Engineer would be a variation.
Regards,
Prof. Sam.

Thanks,
From: jasim mohamed [mailto:[email protected]]
Sent: Tuesday, July 20, 2010 10:24 AM
Subject:
Dear Dr. Sam
Please it will be very appreciated if you comment on my below question;

Lump sum Contract with fixed price, there are two different items indicated in the
B.O.Q with only rate without amount /provision , these two items are
shown/specified on the Contract drawings as part of Contractors scope of works .
one of these items was executed and the other was not executed (deleted by Client).
How we pay the Contractor? If the items in the BOQ were not classified as Provisional
Items, or as Rate-Only items (with an explanation in the Preamble that they would be
re-measured), then since both items are shown in the drawings they are deemed to be
within the contracted scope of work. If one is omitted, a fair and reasonable price of such
omitted item has to be deducted from the Lump Sum contracted price.
Regards,
Prof. Sam.

From: Nayanasena Wanninayake [mailto:[email protected]]

Sent: Tuesday, July 20, 2010 11:06 AM
Subject: Negative Variations in Lump sum Contract
Prof. Sam,
Negative Variations in Lump Sum Contract
I take this opportunity to thank you for your fruitful classes as well as
valuable education given us with the form of Q. & A. which widened our
area of knowledge towards contract administration.
You have mentioned in most occasions that in a Lump sum Contract,
an omission cannot be instructed (as a negative Variation) for an item
which is not shown in the Contract drawings but appears only in the
B.O.Q.
How we can convince above (basic principle) to the Client/Consultant
where the Contract document doesn't say about it?
Is there any other standard documents for references or guidance?.
Please comment.
Ask from the Client/Consultant if there is no item in the BOQ for a
Chandelier shown in the drawing, whether they would agree to instruct
a variation to add that item to the BOQ.
Obviously they wont. Therefore a variation cannot be instructed to
omit an item for a Chandelier in the BOQ which is not shown in the
drawing.
It is not essential to refer to any documents for such standard practices
in the construction industry, however if your contract is FIDIC 4th,
then you can draw their attention to Sub-Clause 55.1 which states that
the BOQ quantities are not to be used for carrying out work. Therefore
it goes without saying that only the quantities that can be inferred from
the drawings should be executed by the contractor (and therefore his
Lump Sum Price is for those quantities obtainable from the drawings
and not for the quantities given in the BOQ) and therefore no
deduction can be made to a Lump Sum Contract Price unless an item
of work/quantity is omitted from the drawings.
Regards,
Prof. Sam.

Regards,
Nayanasena
Quantity Surveyor
From: Yvette [mailto:[email protected]]
Sent: Tuesday, July 06, 2010 1:14 PM
Subject: variation question
Hi Prof Sam,
I thank you for sending us these Q & As , which really helpful with our
day to day Contracts Administration task. I hope to receive more from
you.
And also, I would like to take this opportunity to express my

appreciation with so much additional knowledge you shared with us on
the Be a Sound Contract Administrator class this June 2010.
I would like to ask your opinion, since I am facing hard time arguing
with the Engineer regarding determination of our variations. The
scenario is this. The Engineer issued an instruction it is written in
form of a letter, CVI or RFI, but refuse to put into EI form on many
items, which we believe is out of our original scope of work. And the
Engineer stated to proceed and advised that this instruction is written
but not has to be in the EI form. We made our notification for the cost
and time impact but the engineer refused to confirm that these are
indeed a variation, however, instructed us to proceed without further
delay. Detailed particulars were also submitted and still refused by the
engineer to determine that these are variations and insisted that these
are part of the original scope.
Can the contractor still proceed? How are we going to reply to the
Engineer that we are not proceeding with any work without confirming
that these are a variations. Thanks in advance if you could share with
us your comment.
The Contractor has an obligation to comply with instructions of the
Engineer and therefore if the instructed work is necessary or
appropriate (to complete the original scope of work) the contractor
should execute them. If a dispute arises later as to whether they are
variations or not, a wise man (arbitrator/judge) would decide who is
right. If it is a variation (i.e. if proved as a change to the original scope
of work), then it would be valued according to the contract.
If however you are confident that the variations are neither necessary
nor appropriate, then you can notify so and put on record that you are
under no obligation to execute them, but nevertheless would execute
them as the Engineer insists, and state in the notification that you
would maintain records of cost of execution on top of which you require
..% OH&P, as the instructed work is outside the contracted scope of
work and you are not bound by the contract rates/prices, and copy it to
the Employer.
Regards,
Prof. Sam.


Regards,
Yvette T. Vivar
Contract Administrator

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My comments are given in red below:-----Original Message----From: thirimadura ariyaratna [mailto:ariyaratnat@yahoo.

Arbitrator / Mediator - London Court of International Arbitration

Thanks and Best Regards,

Arbitrator / Mediator - London Court of International Arbitration

Await your early and favorable responses.

Senior Quantity Surveyor

Arbitrator / Mediator - London Court of International Arbitration

Your early and favourable response would be appreciated.

----- Original Message ----From: Nabil H

prelims if he has not provided this to the project?

Arbitrator / Mediator - London Court of International Arbitration

Thanks for your time

----- Original Message ----From: Mufeez Lebbe

Clause 18.2.d (Insurance for Works & Contractors equipment, FIDIC

Arbitrator / Mediator - London Court of International Arbitration

Looking forward your comments on my queries above, Professor.

Arbitrator / Mediator - London Court of International Arbitration

Thanks & Regards,

Phone: (00971) 042807242

Dear Dr. Sam,

Arbitrator / Mediator - London Court of International Arbitration

Middle East Representative - Australian Inst. of Qty. Surveyors

Arbitrator / Mediator - London Court of International Arbitration

Dear Dr. Sam

Please it will be very appreciated if you comment on my below question;

Arbitrator / Mediator - London Court of International Arbitration

From: Nayanasena Wanninayake [mailto:[email protected]]

Arbitrator / Mediator - London Court of International Arbitration

And also, I would like to take this opportunity to express my

Arbitrator / Mediator - London Court of International Arbitration

Middle East Representative - Australian Inst. of Qty. Surveyors

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