Jan 11-Q&A-1

My comments are given in red below :----- Original Message ----From: Shaikh Rizwanali
To: sam99@eim.ae
Date: Sun, 17 Apr 2011 12:58:07 +0400
Subject: Request for clarification on variation issue
Hi Dr. Sam,
Hope u r fine and in good health. I had attended your SCA classes in November 2008 or
2009.
Sir,
I have come across a situation wherein, Landscaping sub contractor is saying to approve the
variation then only he will proceed with the works. Can u tell me contractually is it right and
further elaborate me on the things in detail. The subcontractor is nominated. If the variation is
either necessary or appropriate the Subcontractor cannot say that he will not carry it out until
its value is approved. If it is neither necessary nor appropriate, then he can refuse to carry it
out until his quotation for it is approved/accepted.
In case he was domestic then how we would have dealt with it. Same as above.
Please let me know the argument from FIDIC point of view as our contract with client is
based on FIDIC 1987 and so with sub contractor. The wording .. the Contractor shall do
. found in Sub-Clause 51.1 refers to the Contractors obligation to carry out variations
which are either necessary or appropriate. If the Contractor refuses to carry them out, then he
would be in breach of contract.
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
Regards
Shaikh Rizwanali
Senior Quantity Surveyor
---- Original Message ----From: edward beragama
To: sam99@eim.ae
Date: Mon, 11 Apr 2011 22:22:50 +0400
Subject: CA-AC Alumini
Dear Prof.
Appreciate if you could clarify the following:

In FIDIC 1987 4th edition type contract, is it possible to claim EOT and cost under the sub
clause 1.5 (notice, consent, approval, certificate etc) by parties if delayed?
Since the EOT should always be pursuant to Clause 44 and not any other clause, for such
delays (as referred to in Sub-Clause 1.5), the EOT can be claimed pursuant to Sub-Clause
44.1 (b) or (d). Since Sub-Clause 1.5 is silent about costs, unless the particular delay can also
be classified as a delay under Sub-Clause 6.4, the costs have to be claimed as damages for
breach of contract pursuant to the "or otherwise" provision in Sub-Clause 53.1.
Regards,
Prof. Sam.

BRGS,
Edward
From: Sachin Dashputre [mailto:sdashputre@pproject.ae]
Sent: Wednesday, March 16, 2011 10:18 AM
To: sam99@eim.ae
Subject: RE: Latest Q&A + important message
Dear Dr. Sam,

I am surely benefited by attending your course. Thank you very much for the
same.
I may not be able to attend the further program as there are some other
commitments. However, please let me know as when the same advance course
is going to be conducted again. There is no Advanced Class scheduled for this
year. However, if SCA Alumni are interested, I can spare some time in May for an
Advanced Class. Please let me know if you are interested in an Advanced Class in
May 2011.
One query:
I am working with lead consultancy for a major project in Abu Dhabi. We have our
contract which says (in Arabic) that any queries/ submittals being raised by the
contractor has to be answered within 3 days, however the general requirements
(which was reviewed with us) says the contractor shall allow for 14 days for
reviews requiring consultant only and 45 days for the reviews requiring
consultant, P.M and Client review.
The P.M. is pushing us to review the documents within 3 days which is obviously
very difficult and not as per industry practice. We have several correspondences
(for almost 5 months) but no agreement.
Can you comment on this situation? This is a clear discrepancy in the documents
for which the Contractor is not responsible. If the Contractor can demonstrate
that a 14 day or 45 day response time would delay/disrupt the work, then this
discrepancy would be interpreted in his favour, upholding the 3 days as the
applicable response time, thus entitling the contractor to EOT and
prolongation/disruption costs which he can prove, if the 3 days are exceeded.
Regards,
Prof. Sam.

Regards,
Yours sincerely,
Sachin Dashputre
QA/QC Manager
From: vijay_madne@rediffmail.com [mailto:vijay_madne@rediffmail.com]

Sent: Saturday, January 29, 2011 4:13 PM
To: Prof. Sam
Dear Prof. Sam,
I would like to give a big thanks to you for giving us an opportunity to attend SCA training course
conducted by you on 14/01, 21/01 & 28/01/2011 arranged at Al Futtaim Training Center, Dubai, UAE.
The entire course was beautifully structured by you. It was very fruitful, knowledgeable and definitely
it was helpful in enhancing our knowledge.
Once again thanks to you on behalf of all members of this course Batch (Jan-2011) for your kind
guidance & uncountable efforts devoted by you during the training course.
We felt lucky to to have such a genius & kind person like you in the construction industry.
We are committed and will always remember your inspiring teachings and talks, which we received
during this training course...
We will try our level best to become more capable, efficient, honest, impartial and ultimately Sound
Contracts Administrator to contribute the best possible to our construction Industry.
Regards
Vijaykumar B. Madne
From: Kalupahanage, Ruchira [mailto:Ruchira.Kalupahanage@Fgould.com]

Sent: Tuesday, March 15, 2011 6:07 PM
To: sam99@eim.ae
Subject: Re Measure Contract
Dear Sir,
How are you sir? Trust you are doing well and wish the same. With regard to my project Landscape
Contract there was a design & builds lump sum item. The Contract awarded under re measure basis.
Now we are busy with finalising the final account in this Contract. But the Cost consultant advice the
concern parties saying that (Client & Contractor) the Contractor cannot allow the (design build item)
Plant & tools cost in the particular item and it must be priced in the general items. (Preliminaries)
However, the contractor claiming and advising it, that the money for Plant and equipment for the
irrigation works allow in the particular item and not in the P&G. Because, its a design & build item.
Accordingly please advice me how we can resolve this dispute.(Who is correct? Contractor or
Consultant)
Your valuable comments are very important to me.
Re-measure contracts can have lump sum items in them. Since you say that the Design & Build
scope is a lump sum item, then this item should not be re-measured and the lump sum should be paid
to the contractor. Consequently, the question, as to whether the equipment and tools are priced within
the lump sum item or within the Preliminaries, does not arise.
Regards,
Prof. Sam.

Thanks/Regards
K.C.Ruchira
----- Original Message ----From: Joseph Ubald
To: "'prof.sam'" <sam99@eim.ae>
Date: Sun, 03 Apr 2011 15:52:12 +0400
Subject: Employer decisions
Dear Prof. Sam,

Thank you so much for all the updates of Q&A through which all of us learn a lot in contract
administration. Is there any chance that the advance course be conducted in Abu Dhabi shortly ?
Unfortunately no. However if the Alumni are interested it can be held in Dubai in May 2011.
Now I put a case for your comments, please.
Contract period was 12 months for a road project of 20km consisting of three Roundabouts and
straight road lengths, on FIDIC 1987 version. Due to changes instructed by the Engineer but not
covered in any VO , the period has gone up to 18 months for substantial completion. Employer did not
issue the ToC alleging that the works of about 3km was found damaged. Contractor argued the
damage is due to some external causes on these areas and therefore it is not its responsibility to
repair. In other areas no damage occurred. Employer contended the ToC will be issued if this is
repaired.
Q.
Why the Employer cannot issue the ToC for the un-defective part of the project and withhold
the performance certificate on the above condition? Is this stand of Employer correct? If the
other 15 km have been opened for traffic then the Contractor can get a ToC under SubClause 48.2 (b) or (c). If the other 15 km (have not been opened for traffic but) is suitable for
opening for traffic, then the Contractor can get a ToC under Sub-Clause 48.3 as the Engineer
should act fairly and reasonably to issue the ToC even though it is at his discretion. If the 15
km cannot be opened to traffic until the 3 km are repaired then the Employer is correct, but
the Contractor can get EOT/Costs, if he is not responsible for the damages.
On the above contract, after the request for ToC on substantial completion, a few number of additional
works have been instructed (without VOs) to the value of about 10% contract price to complete the
whole works upon 21 months. Employer has already deducted the LDs from the progress payment of
the contractor within 12 months, although the EoTs were submitted within 12onths but not evaluated
by the Engineer.
Q
Is it right to deduct the Lds without determination of the requested EOT? No. If the Contractor
is fairly entitled to the claimed EOT, then the Contractor is entitled to have the LDs refunded with
interest.
Q.
Even if it is proved that there is some culpable delay caused by the contractor within 18
months; can the Employer deduct the LDs? If the effects are concurrent, then no. If they are
sequential, then yes.
I think, it cannot. This is on the view that the Employer has already legalized the delay of the
contractor by issuing additional works forming part of the contract, after the request for ToC,.
Is my stand right? See above.
Regards,
Prof. Sam.

Regards
Joseph Ubald C.Eng
From: Upul Bandara [mailto:bandara_upul@yahoo.com]

Sent: Wednesday, March 23, 2011 10:55 AM
To: sam99@eim.ae
Subject: Re: Final Call - SCA 25th March
Dear Professor,
I am one of the early student of your SCA class and unfortunately i couldn't follow the CAAC as i had move from DXB to Muscat due to the recession.
I need your contractual advice on the following matter in order to resolve the same.
We as the Engineer of the the project, received a claim for Extension of Time for one (1) day
(expecting much more in the near future) stating that, due to the road agitation by local
community (Omani, this is a recent uprising in the Arab countries) people and that prevent
the workforce reached the site and accordingly the work had to stopped at the site.
I have found only one provision related to such circumstances such as riots etc. (Clause 65,
Special Risk) in the Oman Conditions of Contract (more or less similar to FIDIC), but Clause
65 or sub clauses in it do not have any provision to grant EOT, though clause 65.1 states that
"The Contractor shall be under no liability whatsoever whether by way of indemnity...
(Scanned copy attached)
Accordingly, please kindly advice on the following;
Is the Contractor entitle to get EOT (I believe yes) Yes.
If the answer is yes under which clause? 44.1(e) FIDIC 4th (OMAN ?)
Is the Contractor entitle to get EOT plus Cost (I believe yes for EOT, but NO for Cost
as this is beyond the Control of both parties) You are right.
If the answer is yes for both under which clause they entitle for cost
Your comments in this regard is highly appreciated.

Regards,
Prof. Sam.

Thanks
Regards
Upul Bandara
From: Marwan Merhi [mailto:mkmerhi@hotmail.com]
Sent: Saturday, January 15, 2011 11:46 AM
To: Dr SAM
Subject: [!! SPAM] Qustions and Answers
Dear Dr. Sam

You are kindly requested to comment on the following question at your convenience
The Contract:
Sub-Contract: LUMP SUM
Sub-Contract BOQ unit rates and prices as, illustrated below, are itemized based
on various MEP service for each project section or zone and dont incorporate
specific rates for various specific elements of the services installations in each zone
such as; unit rates and prices for Ducts, Pipes, Cables, Containment, etc
Description
Roof Level
Zone EL 1
Lower Ground Floor
Zone AHU-LGR7-1
Quantity
Unit
Rate
Item
Item
Amount
23,618.00
500,000.00
The Contract agreement witnesseth in section 6.08:
The breakdown of the Subcontract Sum included in Post Tender

Clarification 5A (PTC-5A) is provided for information only The Subcontractors letter of 7th October 2006 withdrew the breakdown following the
objections to the same by the Project Manager
At the time of execution of this Agreement the Sub-contractor is preparing a
without prejudice breakdown of the Sub-Contract sum in accordance with
Clause 5.2 of the Conditions of Sub-Contract; Paragraph 8.1(g)(xiii) of the
Instructions to tenders; and Clauses 6.8 and 22.3 of the Main Contract
Conditions. The Parties hereby agree that, when finalized, and approved by
the Project Manager, the foregoing breakdown will be incorporated as an
addendum to the Sub-Contract and will thereafter be utilized as a tool for the
valuation of variations to the Sub-Contract and their subsequent inclusion in
the final account, and also the valuation of interim payment applications.
The Case
The Contract BOQ Section 3 for Mains failure Standby Generating System was priced
as an Item ( NO UNIT RATE) for a lump sum amount of Dhs. 3,209,054.00 as
stipulated in BOQ page 3/31 of the Subcontract Bill of Quantities.
The system comprising 5 no. air cooled generators that were fully omitted in favor of a
new system comprising 3 Nos. water cooled generators instructed under PMI-1475.
The PQS have presently valued this variation by utilizing, for omission, rates
stipulated in PTC-5A breakdown instead of the Contract BOQ and thus omitted
circa 1.4 million more than the lump sum amount extended in the Subcontract BOQ,
the principle of which contravenes the very essence of the fixed price lump sum
contracts. and considering the contractual precedence of the Subcontract Bill of
Quantities Further, the PTC-5A breakdown was intended to be for information only,
as confirmed previously by the Project Manager and the PQS and as clearly
stipulated in the sub-contract agreement, and does not even form part of the
Subcontract Documents.
The Question
Can The PQS value this variation by utilizing, for omission, rates stipulated in
PTC-5A breakdown that was intended to be for information only, as confirmed

previously by the Project Manager and the PQS and as clearly stipulated in the subcontract agreement, and does not even form part of the Subcontract Documents.
If the parties did not agree on the other break-down referred to above and made it an
addendum to the contract, then the only break-down the PM has, for pricing the
omission is PTC-5A. Of course, if the Contractor demonstrates what the actual cost
would have been had the omission not been instructed, then the PM would have to
accept it and disregard PTC-5A.
Regards,
Prof. Sam.

Thank you for your consideration and please accept my best compliments
Marwan Kamel Merhi
From: Nayana Weeraman [mailto:nwjkweeraman@gmail.com]
Sent: Saturday, January 15, 2011 5:26 PM
To: sam99@eim.ae
Subject: Yesterday's Class
Dear Dr.Sam,
I have a question regarding the yesterdays Class. For clarity I

wrote it in the attached file please see it and give me an
answer.
Regards,
Nayana
1. No. Valuation 3 is for Lump Sum Contracts type C. Valuation 2 is for Lump
Sum Contracts Type A & B.
2. Although the answer to your Q1 is No, the Answer to your Q2 is Yes, where
the BOQ provides a place for errors to be priced or where a Schedule of Rates
replaces the BOQ.
Regards,
Prof. Sam.

From: George John [mailto:bijuruby@hotmail.com]

Sent: Tuesday, January 25, 2011 4:20 PM
To: sam99@eim.ae
Subject: RE: Q&A
Dear Sir,
I am an alumni of SCA batch.
Now I am finalising variations of the Main Contractor. This contract was procured on a 2
stage tender process. The blockwork package was awarded to the main contractor only
during the stage 2. This blockwork package contains only light weight blocks.
Later normal solid blocks & hollow blocks were introduced in the project. We asked the
contractor to submit a price analysis from first principle. The contractor is saying that, he
already agreed a rate for the light weight blocks & he submitted a calculation based on %
basis ( loss of productivity etc). I am attaching the scanned copy of the calculation
submitted by the main contractor. Their argument is that client already agreed a unit rate
with contractor. So to derive the new rates they will use the agreed rates as a base.
Sir, please give me your comments about assessing this variation. Contractor is right.
Varied rates should be derived from the existing rates, but need not be on a % basis.
Existing rate should be broken-down to its components (as a mini BOQ), from which
inapplicable components should be removed/varied and new components should be
added to arrive at the varied rate. However, the Contractors risk factors priced within
the original rate should be left in without changing.
Regards,
Prof. Sam.

Best regards,
George John,
Senior Quantity Surveyor
From: RAVICHANDRAN RAMAMOORTHY [mailto:ravendra9@gmail.com]
Sent: Wednesday, January 19, 2011 9:36 PM
To: Prof. Sam

Subject: Re: 14th January - Training - Your response not received
Kind Attn: Prof .Sam

Dear Sir
In my Current project .
For the Construction of valve chambers (approximate depth 3-3.5m)
The tender / Contract dwg shows RCC wall thickness of 500mm and raft slab thickness of
600mm.
During execution stage , the contractor redesigned & prepared shop dwg with RCC Wall
Thickness of 250mm and minimum rebar
Overall the Contractor reduced 25% of RCC Volume in the shop drwaing compared
with Contract Drawing .
The shop drawing is approved by the Clinet/ Consultant for stability and suitability.
However we asked the Contractor to submit the revised rate, because the work is
not carried out as per contract drawing .
The Contractor argument is the work is done as per the shop drawing
and want to be paid as per the BOQ rate and no reduction is applicable
Requesting your comments in this issue
If it is not a Design & Build contract, then wherever the Contractor does not comply with the
drawings/Technical Specification by reducing the scope/sizes/spec, he has to offer the saving
to the Employer. Approval of shop drawings by the Engineer does not relieve the Contractor
from above compliance. It is only in Design and Build Contracts that the Contractor can
choose his own ways to make savings for himself, as long as the Performance Specifications
(Employers Requirements) are satisfied.
Regards,
Prof. Sam.

Regards
Ravichandran
Dear Sir
Sub: Clarification regarding variation
There is one Item in my Current Project
Supply & Installation of Horizontal Split Case Pump
This is a Boq Item and the Contractor priced fotr the same.
This item covered in Section -3 Pumping station
where all the mechanical & electrical (MEP Items) are carried out by a approved Sub
Contractor.
The Cost Breakdown given for the such Item as follows
Labour 10 % Plant 25% Material 48 % OH & Profit 17%
During Execution stage the Specification of the pump Changed (Capacity Increased)
The Contractor proposed a new rate build up.
Rate build up include New material Cost , actual labour , actual plant
in addition to the abovre sub contractor margin 10% is added
then the Main Contractor added anonther 17% as his OH & Profit (mentioning as per
Contract breakdown )
However we have not accepted their version
we as
while pricing the tender , the Contractor aware the said item is operated by the sub contractor
(he claimed 17% for his margin as well
as by the sub contractor)
hence the new rate build up will have one margin of 17% (both for sub contract & main
Contract )
we asked the detailed breakdown for the existing BOQ item , the contractor reluctuant to give
the same
however need your comments for the same
The detailed rate build-up should be investigated. If the Contractor can demonstrate that the
original 10%, 25% and 48% for labour, plant and material were taken from the subcontractor
including subcontractors margin of 10% in each of them (which is usually the case when
giving such break-downs in tender BOQs), then the Contractors argument is correct.
Regards,
Prof. Sam.

Regards
Ravichandran.R
Dear Alumni,
Monster, the jobs people have published this week that the new recruitment requests/ads by
Employers in the region have increased by 29% during the last 6 months (Oct 10 to March
11) even in the construction sector. This should be good news to Contract Administrators as
the job opportunities and promotion prospects are reestablishing. However, Employers are
more cautious now and seek trained contract administrators who are capable of protecting the
interests of the company.
___________________________________________________________________
Questions should be kept short and simple. Attachments should not be sent
with questions.

Jan 11-Q&amp;A-1

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My comments are given in red below :----- Original Message ----From: Shaikh Rizwanali

Arbitrator / Mediator - London Court of International Arbitration

Appreciate if you could clarify the following:

Arbitrator / Mediator - London Court of International Arbitration

Dear Dr. Sam,

Arbitrator / Mediator - London Court of International Arbitration

From: vijay_madne@rediffmail.com [mailto:vijay_madne@rediffmail.com]

From: Kalupahanage, Ruchira [mailto:Ruchira.Kalupahanage@Fgould.com]

Arbitrator / Mediator - London Court of International Arbitration

Dear Prof. Sam,

Arbitrator / Mediator - London Court of International Arbitration

From: Upul Bandara [mailto:bandara_upul@yahoo.com]

Is the Contractor entitle to get EOT (I believe yes) Yes.

Your comments in this regard is highly appreciated.

Arbitrator / Mediator - London Court of International Arbitration

Dear Dr. Sam

Sub-Contract: LUMP SUM

The Contract agreement witnesseth in section 6.08:

The breakdown of the Subcontract Sum included in Post Tender

PTC-5A breakdown that was intended to be for information only, as confirmed

Arbitrator / Mediator - London Court of International Arbitration

I have a question regarding the yesterdays Class. For clarity I

Arbitrator / Mediator - London Court of International Arbitration

From: George John [mailto:bijuruby@hotmail.com]

Arbitrator / Mediator - London Court of International Arbitration

To: Prof. Sam

Kind Attn: Prof .Sam

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Mediator - London Court of International Arbitration

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