Archive for the ‘FIDIC’ Category

How to Deal with Delay Caused by a Nominated Subcontractor

nominated subcontractor

Many years ago when I used to deal with the JCT forms of contract, if a nominated subcontractor delayed the works, the contractor could use this as a legitimate reason to claim an extension of time. Either things have either changed since then, or not all forms of contract take this view.

Under the FIDIC Red Book form of contract, the Engineer may appoint a nominated subcontractor, but once the Contractor has accepted the nomination, he becomes responsible for the actions of the subcontractor and may not claim for any failures of the subcontractor.

In a situation where the Engineer nominates a subcontractor who has submitted a competitive price but is incapable of providing adequate performance (does this sound familiar at all?) it seems inequitable to make the Contractor responsible when he has had nothing to do with the selection of the subcontractor. Does the Contractor have any recourse in such a scenario? Well, sort of, as we will see.

(more…)

Continue reading

How to Calculate the Recovery of Preliminaries on a Reduced Scope of Works

I was recently contacted by a blog reader who requested some advice on a project in Qatar where the Employer omitted a large part of the Works and also wanted to deduct money from the Contractor’s preliminaries as part of the price adjustment.

A
I thought that this would make an interesting case to share with the rest of our readers so, the scenario was as follows:

The Contract Price is a Fixed Price Lump Sum.

The Contract Bill of Quantities contains all-inclusive rates which include preliminaries, overheads and profit. No separate prices for preliminaries are included.

After approximately 75% of the works were completed the Employer omitted a large portion of the balance works, which will not be completed by others. (more…)

Continue reading

New Top Tips Paper! Application of Dispute Boards on Construction Projects

Most contracts have provisions whereby the Engineer, or his equivalent under other forms of contract, is required to make a fair determination of the claim. They also include a requirement that the parties attempt to reach amicable agreement in situations where either party does not accept the Engineer’s determination. (more…)

Continue reading

How to Make Sure Your Claims are Accepted

If you wish to ensure that your claims are accepted, you need to bear in mind EC Harris’ (now ARCADIS) report Global Construction Disputes Report. This report cites incomplete and/or unsubstantiated claims as one of the major reasons for construction industry disputes.

A typical scenario that I have experienced on many occasions is when a contractor submits a badly prepared or ‘inadequately expressed’ claim to the engineer for evaluation and the engineer rejects the claim on the basis that the contractor has not proved his case. The engineer is quite correct to do this, because the onus is on the claimant to prove that the claim is just and in such a case, the Contractor has not done so. The Contractor, however, believing that he has good basis for the claim, then refers the matter as a dispute. (more…)

Continue reading

Claim for Increased Costs on a Fixed Price Contract

Are there circumstances whereby a contractor may claim increased costs of materials on a fixed price contract? As usual, this would depend on the particular contract, but if we take FIDIC as an example, yes there are.

Consider the following situation:

  1. The Contract duration is two years.
  2. The structural work contains large quantities of concreting which is all programmed to be completed within the first 8 months of the project.
  3. In the last six months of the project, the Engineer instructs a Variation which requires substantial additional concrete works.
  4. Since the beginning of the Contract, the cost of ready-mixed concrete and reinforcement steel have increased substantially.

(more…)

Continue reading