CONTRACTUAL ADVICE

PROBLEM RECEIVED:

We were appointed by the General Contractor to examine several outstanding variations and cost claims. Due to the Contractor not being clear on the change process for Design & Build projects. The Contractor submitted several Variations and Prolongation Cost for approved Extension of Time Claims, without any positive resolution.

THE PROCESS & SOLUTION:

We contacted the General Contractor and set up numerous meetings. After receiving the Contract and Change Orders, We studied the relevance of the submitted Variations and Prolongation Costs.

The FIDIC Yellow Book 1999 Clause 13.1 provides that the Employer could initiate variations to the work of the Contractor at any time before issuing the Take-Over Certificate.

The Contractor received the instruction from the Engineer for additional work. The correct pricing of the Variation as per Clause 13.3 Variation Procedure was indicated on the Variation Proposals.

We verified against site records that the additional work was completed and inspected by the Engineer. We wrote a letter on behalf of the Contractor with the attached:
1. Contract clauses 13.1 and13.3,
2. Engineers instruction letter,
3. Variation pricing detail,
4. Variation prices compared against Bill of Quantities rates.
5. Signed approval from the Quality Manager from the Engineer of the work.
6. Updated Variation Order value after Overhead and Profit added (that was previously omitted)

The Prolongation Costs submitted were examined by us. The mistake from the General Contractor was to include it's Preliminary & General Costs (P&G’s) instead of actual Costs. The SCL Protocol states that a Contractor shall only be entitled to any additional costs incurred as a specific consequence of the Employer-caused delay.

We engaged with the Quantity Surveyor from the Contractor and the Accounts team to extract actual costs during the actual delay period.

An updated Prolongation Cost calculation including a report to highlight the FIDIC and SCL Protocols provisions were sent to the Engineer.

The Contractor received the increase in the Contract value and compensation in the next payment certificate.