May 14-Q&A-1

My comments are given below in red fonts :-
----- Original Message -----

From: geraldine linzagan
To: "sam99@eim.ae" <sam99@eim.ae>
Date: Mon, 07 Jul 2014 14:07:32 +0800
Subject: Bank Guarantee & Insurance
Dear Dr. Sam,
I attended SCA last April 2013 and thank you for your valuable sessions. It provided me with more knowledge in Contracts
Administration.
And since then, this training had opened an opportunity for me to work in a prestigious Company in Abu Dhabi.
We have a current situation now, wherein the project has been delayed due to the clients' always putting it on
hold. If delay claims will be applied will bank guarantee & Insurances also be extended?
Yes, but it is better to ask from the client whether or not to extend them.
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
Construction Law & Dispute Resolution Advisory Board member
of British University in Dubai
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668
Thank you to enlighten us with your comments and suggestion on the above.
Regards,
Geraldine

From: Sisira Dharmathilaka
To: INDRAWANSA SAMARATUN <sam99@emirates.net.ae>
Date: Sun, 22 Jun 2014 22:11:10 -0700
Subject: Please clarify,
Dear Professor Sam,
I hope that you are doing well and wish you good health!
kindly comment on the following issues,
1. In a fixed price contract, price is fixed till end of the Partial

completion of the project or till end of the defect liability period
of the project? If no duration for fixed/firm price is mentioned in
the Contract then it is very likely that such period is construed
by Arbitrators/Courts as Original Time for Completion (without
any EOT). If the Consultant used incorrect terminology like
"prices shall be fixed for the Contract Period then it is very
likely that such period would be construed by Arbitrators/Courts
as Original Time for Completion (without any EOT) plus the
Defects Liability Period. Should this be mentioned in the
contract? It is a must to mention the period in the Contract in
order to avoid the ambiguity requiring interpretations as above.
2. Where the contractor did not face some risks; however he

implemented mitigation plan to avoid the said risks, In the final
invoice, is it right for the employer/consultant to deduct part of
the allocated risk amount from the contractor where he did not
face such risks? If it was priced as a contractor's risk then it
cannot be deducted (except where the contract expressly
states that it can be deducted as in the penultimate paragraph
of Sub-Clause 4.12 in FIDIC 1999, the complexity of which we
discuss in detail during the Advanced Class).
Regards,
Prof. Sam.
Thank You & Best Regards,
Sisira
From: eva olofernes
To: "Prof. Sam" <sam99@eim.ae>
Date: Thu, 12 Jun 2014 07:00:31 -0700 (PDT)
Subject: Query
Dear Prof. Sam,
Thank you very much for Q&A documents you've sent me. I was not able to raise a question during
your recent SCA Seminar in June 2014 here in Doha. I would be very glad if you could help me with
the below scenario;
The Contract is a fixed lump sum. The Contractor has submitted its IPA
003 that claims for the whole amount of GRs for items which are not time
related i.e. PII, Performance bonds, Insurances etc. (priced as lump sum in
the contract). The contract says that monthly payments for Prelims and
GRs shall only be made for those costs which have been properly incurred
and payment for all items with unit of measure "Lot", "LS", or "item" shall
be upon completion of the work. Is it right that payment can be made for
such items considering the above? If so, what are the things that they
need to provide?
It is important to note that completion of the work is different from

completion of the Works and therefore payment cannot be withheld until
the completion of the Works. Payment is due when the scope covered
by the particular item is complete. If the Contractor has procured PII, PB,
Insurance etc. and submitted copies of the policies and proof of payment
of the premiums, then payment for such scope is due as the amounts
stated in the BOQ for such items. (We discuss the difference between
work and Works during SCA Session 1)
Regards,
Prof. Sam.
Thanks a lot!
Best regards,
Eva Olofernes

From: Wimalaratne Gamlath
Date: Thu, 13 Mar 2014 17:56:34 +0400
Subject: FIDIC 1999 - Insurances & Variations
Dear Sir,
I am an alumni of your group and having following doubts.
We have a new Contract based on FIDIC 1999.
1. What evidence we should give under Clause 18.1a Proof of payment of insurance premiums.
2. Clause 18.2 Is it CAR policy? Yes
3. Clause 18.3 Isnt it covered under CAR policy? You can either have a separate policy for this or it could be
combined with the CAR.
4. Client has deleted Clause 12 (completely) under particular conditions. So. How do we evaluate Variations (if
any)? As we discuss in detail during the Advanced Class, Clause 12 is not only to value variations but also to
value original scope of work. If Clause 12 is deleted then the Contract is silent as to how original scope of work
and variations should be valued, which is an ambiguity which should be resolved in favour of the Contractor and
therefore the original scope of work and the variations should be valued using the existing rates/prices and where
they are not applicable then using new rates and prices to reflect a fair value of the work and variations.
Regards,
Prof. Sam.
Kindly request your comments.
Kind Regards
Gamlath W

From: Indika Mudannayake
Date: Wed, 25 Jun 2014 06:50:54 -0700
Subject: Re: Latest SCA Q&A plus a message to Alumni
Dear Sir,
Could you please comment on the following?
Suppose there is a BOQ item like below in a lump sum contract.
Plants Type A; Qty 10 No. Rate $10, Amount $100

And at the same time the drawing shows 15 numbers of plants.
A variation has been issued to change all plant type A to plant type B, which costs $15 each.
In this case what will be the correct calculation against the variation issued?
1. Omit $100 (BOQ amount of the affected item) and add $225 (Type C $15 x 15) This is
correct if there was no place given in the BOQ to price the Dwg/BOQ errors (but Omission
of $100 is not arrived at by taking the amount for this item but by dividing 100 by 15 to
arrive at a new rate and then multiplying by the actual quantity)
2. Omit $ 150 (Type A $10 x 15 drawing) and add $225 (Type C $15 x 15) This is correct if
there was a place given in the BOQ to price the Dwg/BOQ errors.
Can the contractor argue pertaining to point 2 above saying it is not justifiable to omit more than he
has allowed for a particular item of work? If a place was given in the BOQ to price the Dwg/BOQ
errors, then he cannot argue as suggested. (we discussed in detail this issue during SCA Session
1)
Or
In an opposite situation where the drawing shows less than that in the BOQ, if the consultant propose
to omit total amount in the BOQ (as in point 1 above):
Can the contractor argue saying it is not justifiable to omit more than shown in the drawing? Yes & No.
See 1 & 2 above.
Regards,
Prof. Sam.
Thank you and best regards

Indika - Doha Qatar

From: Nadessha Darshani
To: sam99@eim.ae
Date: Wed, 09 Jul 2014 16:27:23 +0530
Subject: Subject matter
Dr Sam,
I was one of your student who attended to your classes in Dubai. Now I work in SL and got a question related to
my project. I jotted down the details below. please comment if you have time.
1. Subcontractor was awarded a measure and pay contract

2. time related prelims in the BOQ says 12 months in the Qty column. no rate given but the subby included
lumpsum amount in the amount column
Ex: say electricity bill- Qty = 12, unit=month, rate=blank, Amount= 225k
3. letter of award referred the contract to FIDIC red book
4. duration given in the contract mistakenly is 9 months
Question - Subcon claims since the contract says the duration as 9 months, it governs and what mentioned in
BOQ as 12 months is ignorable, since document order in FIDIC says contract comes first.
Even in a re-measurable contract, there are items which should not be re-measured (especially the contractors
risk items). Either the Method of Measurement (according to which the BOQ was prepared) or the Pricing
Preamble to the BOQ (or at least the item description itself) should have stated whether this particular item
should be re-measured. If it can be established that this item is re-measurable, then the rate for the item would
be 225k divided by 12. The priority of the documents is inapplicable as the quantity of 12 could have been given
for contingencies of over-stay at site beyond the Time for Completion for the purpose of attending to snags etc.
Therefore the actual number of months should be multiplied by the aforesaid rate.
If it can be established that this item is not to be re-measured, then the payment would be a lump sum of 225k
irrespective of the actual number of the months in the Time for Completion (subject to any additions if EOT with
costs is awarded).
If a doubt exists as to whether or not the item should be re-measured, then it would be resolved in favour of the
Subcontractor (i.e. by valuing using one of the above two methods which is more favourable to him).
Regards,
Prof. Sam.
please let me know your comments on this.
regards,
Nadeesha..

From: Pradeep Perera
To: "Dr. Sam" <drsam@rakfzbc.ae>, sam99@eim.ae
Date: Wed, 09 Jul 2014 11:37:39 +0400
Subject: Fwd: FW: Please advise
Dear Professor,
Trust this email finds you well. I am one of your students from SCA Alumni and looking for your clarification for
following issue.
This is related to a re-measured contract. There is a BOQ item for supply and install fire
hydrants.
The BOQ description was for 100mm dia system while the tender drawings has clearly
mentioned the fire hydrants should be in 160mm dia PVC pipe with 150mm dia gate valves.
This discrepancy has never been queried at the tender stage.
The contractor has installed 160mm dia system at site to the Engineers satisfaction. Now
during the final re-measurement stage the contractor is looking for a rate revision.
Since the contract is re-measurable, is the contractor eligible for a rate revision? Or can we
reject their request for a rate revision based on the following?
(a) the drawings have the higher priority over BOQ. No.
(b) no queries were made at tender stage No.
Being a re-measurable contract, there was no obligation on the part of the tenderer/Contractor
to price the item for any other scope other than a 100 mm system. For the constructed 160
mm system there is no applicable rate in the BOQ and therefore a suitable rate should be
agreed. Due to the error in the documents (for which the Contractor is not responsible), the
Employer may have to pay more than what he would otherwise have had to pay, but he can
recover it by suing the QS consultant who made the error in the BOQ.
Regards,
Prof. Sam.
Please comment.
Thank you very much.
Best Regards,
Pradeep

From: Sherwin Salcedo
Date: Sun, 06 Jul 2014 03:25:46 -0700
Subject: Re: Q&ATo:
Hi Prof Sam,
I have a query the situation is as follows:
1. We have a provisional sum Item in the amount of QR 1M.
2. However, we found out that there are details in the Contract drawings and we can
measure the provisional item in detail.
3. The Contract is lump sum.
Can the Client argue that the Contractor has already considered the Provisional sum
Item since there are actually detail drawings on the IFC, therefore they can delete the
Provisional sum as a whole.
In the Tender Documents, if the Tenderers were instructed to allow a Provisional

Sum for a certain scope of work, then the price/cost of such scope (even though it is
shown in the Drawings/Specification), cannot be considered as included within the
remainder of the Lump Sum Contract Price, as it is already covered within the
Provisional Sum which in turn is within the Lump Sum Contract Price. There is no
obligation on the part of the Tenderer/Contractor to have included such cost/price
twice within the Contract Price.
Moreover it is quite common to show in the Drawings, scope of work covered by
Provisional Sums.
Also the issue is an ambiguity which should be resolved in favour of the Contractor.
Regards,
Prof. Sam.
Regards,
Sherwin R. Salcedo, CE, EnSE | Quantity Surveyor

From: .
To: "Prof. Sam" <sam99@eim.ae>
Date: Wed, 02 Jul 2014 14:28:05 +0400
Subject: Re: Latest SCA Q&A plus a message to Alumni
Dear Prof. Sam,
I need your valuable input on the following.
A re measurable contract was agreed for duration of 200 calendar days. A daily penalty was
calculated based on the formula 10% X contract value / 20% duration = 60000.
The client did assign additional works, accordingly the contract price has been changed to
(X+X1) and the duration to ( D+D1).
1- Can the daily penalty be changed due to additional works? Please note that no
new agreement was made to adjust the penalty figures. If there are no definitions
given for the expressions contract value and duration, then there are ambiguities
as to whether or not they are of fixed/variable nature, which ambiguities should be
resolved in favour of the Contractor and therefore it is very likely that an
Arbitrator/Court would interpret them as of fixed nature and therefore the daily
penalty rate of 60,000/- would be fixed.
2- The contractor argued that the original scope was finished; accordingly the delay
penalty should be calculated on the outstanding works and not the total. Is he right in
his claim? If the original scope is of stand-alone nature and could have been put to its
intended use prior to completion of the additional work, and if the Client took-over
such work, then it is not subject to any penalty.
3- The contractor did not apply for a partial TOC as the contract does not state for
that. How the application of penalty will be calculated? This doesnt appear to be the
case, judging from Questions 4 and 5 below !
4- The client used part of the completed works without having TOC issued. How
the application of daily penalty would be calculated? Assuming
A- At the time of Engineers assessment the original scope of 90%

completed. Additional works 90% completed If the Client used part of the
Works then the presence or absence of the TOC would not make any
difference to the reduction in the daily penalty rate (if the contract is similar
to FIDIC). Daily penalty rate should be reduced in the proportion of the value
of the completed work which bears to the value of the whole of the Works.
B- At the time of Engineers assessment the original scope of 100% completed

and the additional works 90%completed. ditto-
5- The client used part of the completed works having TOC issued. How the
application of daily penalty would be calculated? Assuming
A- At the time of Engineers assessment the original scope of 90%

completed. Additional works 90% completed ditto-
B - At the time of Engineers assessment the original scope of 100% completed

and the additional works 90%completed. ditto-
Since this is for an on-going project please hide the sender details. This Q&A forum should
be used only for interaction of academic interests, and therefore advice should not be sought
for your projects. Such advice should be sought by your company under professional services
terms and conditions with our company.
Regards,
Prof. Sam.
Awaiting your valuable response.
Regards,

From: Paterno Ortiz
To: sam99@eim.ae
Date: Sun, 29 Jun 2014 11:37:24 +0300
Subject: Contract BOQ vs Contract Drawings vs IFC2/IFC3 Drawings
Dear Prof Sam,
I write to clarify which quantity will govern in the assessment of variation in FIDIC form (lump sum/remeasurable
contract) if Contract BOQ and Contract Drawings are not the same in quantity and yet signed the contract
documents. Example, light fittings BOQ qty is 300 nos. and Contract drawings qty is 500 nos. And finally during
the course of construction they issue 600 nos as IFC2/IFC3 drawings. Which quantity will be taken in the re-
measurement assessment?
1. Will it be IFC2/IFC3 drawings deduct Contract Drawings (600nos deduct 500nos)or

2. Will it be IFC2/IFC3 drawings deduct Contract BOQ (600 nos deduct 300nos)?
If the contract is Lump Sum type, then 500 Nos. is considered to be included within the Lump Sum Contract Price
and the remaining 100 Nos. would be paid as a variation. Variation would be valued using BOQ Rate if there was
a place provided in the BOQ to price quantity errors. If no such place was provided, then a new Rate would be
calculated by dividing the total amount of the Item by 500 (If the Contractor is making a loss due to this lower
rate, then he should refuse to carry out the variation on the grounds that it is not necessary.)
If the contract is Re-Measurement type, then 600 Nos. would be valued using the BOQ Rate, for payment.
Regards,
Prof. Sam.
Please comment.
From class June 2014 Qatar.
Kind regards
From: laeeqhassan@hotmail.com
To: sam99@eim.ae
Subject: FIDIC 1987-Clause 42, 67 and 53
Date: Wed, 28 May 2014 04:33:58 -0400
Dear Prf. Sam
Hope my mail finds you well!
I have an interesting question. The Contractor has to give 28 days notice normally as per clause 53. Now there is
a scenario of delayed delivery of site possession to the contractor and clause 42 and 42.2 which concerns this
aspect says that the Engineer shall, after due consultation with the Employer and the contractor, determine EOT
and costs to be added to contract price with a follow up of notification to both parties.
My question is do you feel that still contractor has to give this 28 day notice?
For EOT Notice should be given within 28 days stated in 44.2 and for Costs Notice should be given within 28
days stated in 53.1
The second aspect for consideration is that contractor has nothing to do in such a delay case and wait for
Engineer's notification. Do you agree? No
The third aspect is if the Engineer only accord time extension but not costs, in that case what action can be taken
by the contractor? If the Notice is given in a timely manner and the claim has been submitted in a timely manner,
then refer the dispute for Engineers Decision under 67.1
Regards,
Prof. Sam.
Thanks & Regards,

Laeeq Hassan
KSA

From: Seyad Aslam Mohammed
Date: Sun, 22 Jun 2014 10:49:00 +0400
Subject: Clarification on Lump Sum Contract
Dear Sam,
Please could you clarify the following issue:
1) Its a lump sum contract.
2) The Contractor had priced a BoQ page which contained 5 items.
3) According to addendum this page was revised to contain only 4 items and revised BoQ page was issued.
4) The Contractor had acknowledged the addendum in The Tender page of Volume 1 but had not used the revised
BoQ page.
5) When preparing the Contract Document the revised BoQ page was inserted but the Contractor had kept the
same page total as for 5 items.
6) In view of the above, are we entitled for a saving for that one item priced in the tender. No.
The Lump Sum Contract Price is for the full scope of work and work cannot be re-measured by adding/omitting from
the Contract Price unless a Variation is instructed.
Regards,
Prof. Sam.
I am seeking your comments due different interpretation.
Thanking you.
Regards
Aslam

From: Zakiuddin Ahmed
To: sam99@eim.ae
Date: Wed, 18 Jun 2014 14:08:05 +0400
Subject: Re: FW: Last of the past Q&A plus message
Dear Prof.Sam, Good Afternoon to you Sir,
I was a part of the April 2012 SCA Alumni. I seek your kind guidance in resolving a very tricky situation that my
company is in. Actually, I now work for a Contractor. Due to the availability of drawings only for two facilities
during the inception of the project which comprise of 23 facilities (mostly similar). There was a written agreement
with the Client that the Project with facilities shall be concluded at an agreed Price of AED 133 Million (Lump
sum) of which 33 million were allocated as Provisional Sums for all the external hard landscaping, road
infrastructure, MEP provisional works and Back of house finishes etc. So LOA was received based on an agreed
Lump sum price per facility and 33m PS being separately identified in the total agreed Lump sum figure of 133
Million for the entire project.
Although, External Hard landscaping was clearly identified as a Provisional Sum item, the cost consultant who
had provided to us the BoQ included the hard landscaping paviours in the List of items of the main scope and the
same was forwarded to our Estimation section for Pricing and they priced it as a main scope item (The rates had
to be indicated to arrive at the final agreed Lump sum Figure of AED 100 Million + 33 Million (PS)). Now when the
priced BoQ is already submitted back to the Cost Consultant with a copy to the Client, it is realized that the
external Paviours should have been left alone and shouldn't have been priced as this is a PS item fully, while the
associated amount around 1.30 Million Dirhams should have been re-distributed to the unit rates of the other
items.
Now when the hard landscaping package is finalized it is perceived that this item (concrete paviours) from the
main BoQ shall be considered under the omission list as this is a PS item, does it mean that we are bound to
lose around 1.30 million and there's no way out. I thought this should be communicated to the Cost Consultants
and the Client concurrently seeking their consensus to allow us to revise our unit rates in the main BoQ as
paviours is a part of the Provisional Sums and it's exclusion from the main BoQ without compensation would
mean a loss of AED 1.3Millions to my company. Could you kindly give comments to help us out and if we could
proceed like this and how could we make our case strong enough to defend our legitimate amounts.
Being a Lump Sum Contract, work should not be re-measured. 100 Million is for the original Scope of Work
excluding hard landscaping (which is covered by PS).
Moreover Instructions cannot be issued to omit BOQ Items ! As we discuss in detail during SCA Session 1 ( if
you wish to educate your colleagues and also counterparts working for Consultants and Employers, please
encourage them to attend the SCA)
Also see the reply to Sherwins question above.
Regards,
Prof. Sam.
Thanking you in anticipation of an early response.
Yours faithfully,
Zakiuddin.

From: Eltrih Abig
Date: Sun, 20 Jul 2014 18:39:03 +0800
Subject: Remeasurement Procedure for Remeasurable Contract
Dear Prof. Sam,
I hope you are well.
I apologize that I'm not able to attend to the previously held advance training program
due to busy schedule. I hope I can attend the next advance session. Your Place is
confirmed in the Advanced class starting on 15th August 2014.
I wrote this mail to ask something regarding remeasurement for a remeasurable

Contract.
1. What is the basis of Remeasurement? Is it the First issued IFC drawing and any
change thereafter - quantity wise and scope wise shall be remeasured? Basis for the
re-measurement is the actual work carried out at site (provided that only what has
been instructed are carried out and nothing more). Shop Drawings or As-Built
drawings are the ideal documents for this purpose.
2. It has been informed by the CQS that after agreeing on the remeasure which will
be signed off by the Contractor, CQS and the Engineer, it will now be converted into
fixed quantity and will be fixed all throughout the project duration? If both parties
agree to this, then it can be done, but such new conditions cannot be imposed
unilaterally by one party on the other.
3. I am working on a cladding company and we were asked to prepare the complete
remeasure of the IFC drawings (Tender drawings are not applicable anymore since
at the time of tender the drawings given to us was completely for other package
which makes all our works as Variation) which the Main Contractor has informed that
any item and/or quantity we missed on our remeasure will be at our risk and
subsequently any claim for additional payment, varied rates whatsoever will invalid.
Is this right or not? Not right for the scope/quantities, but if you want varied rates,
then notice for such varied rates should be given immediately. In what way can we
argue? Basis for arguments are the replies given for 1 and 2 above.
Regards,
Prof. Sam.
I'm looking forward to receiving your response at the soonest time possible.
Thanking you.
Eltrih
Class of SCA May 2014

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My comments are given below in red fonts :-

----- Original Message -----

Dear Dr. Sam,

----- Original Message -----

Dear Professor Sam,

kindly comment on the following issues,

1. In a fixed price contract, price is fixed till end of the Partial

2. Where the contractor did not face some risks; however he

PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Thank You & Best Regards,

Dear Prof. Sam,

It is important to note that completion of the work is different from

----- Original Message -----

I am an alumni of your group and having following doubts.

We have a new Contract based on FIDIC 1999.

2. Clause 18.2 Is it CAR policy? Yes

Kindly request your comments.

----- Original Message -----

Could you please comment on the following?

Suppose there is a BOQ item like below in a lump sum contract.

Plants Type A; Qty 10 No. Rate $10, Amount $100

Thank you and best regards

----- Original Message -----

1. Subcontractor was awarded a measure and pay contract

please let me know your comments on this.

----- Original Message -----

(b) no queries were made at tender stage No.

Thank you very much.

----- Original Message -----

I have a query the situation is as follows:

1. We have a provisional sum Item in the amount of QR 1M.

3. The Contract is lump sum.

In the Tender Documents, if the Tenderers were instructed to allow a Provisional

Sherwin R. Salcedo, CE, EnSE | Quantity Surveyor

----- Original Message -----

Dear Prof. Sam,

I need your valuable input on the following.

A- At the time of Engineers assessment the original scope of 90%

B- At the time of Engineers assessment the original scope of 100% completed

A- At the time of Engineers assessment the original scope of 90%

B - At the time of Engineers assessment the original scope of 100% completed

Awaiting your valuable response.

----- Original Message -----

Dear Prof Sam,

1. Will it be IFC2/IFC3 drawings deduct Contract Drawings (600nos deduct 500nos)or

From class June 2014 Qatar.

Dear Prf. Sam

Hope my mail finds you well!

Thanks & Regards,

----- Original Message -----

Please could you clarify the following issue:

1) Its a lump sum contract.

2) The Contractor had priced a BoQ page which contained 5 items.

----- Original Message -----

Dear Prof.Sam, Good Afternoon to you Sir,

Also see the reply to Sherwins question above.

----- Original Message -----

Dear Prof. Sam,

I hope you are well.

I wrote this mail to ask something regarding remeasurement for a remeasurable

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