Jan 10 Q&A-1

My comments are given in red below :From: Rabbay Alam [mailto:rabbayalam99@rediffmail.
com]
Sent: Wednesday, January 27, 2010 12:00 PM
To: [email protected]
Subject: Query
Dear Sir,
Good morning.
Thank you for the commitments and valuable answers you are regularly providing.
I have completed Sound Contract administration course from you, and thank you for
your Q & A, mails you are sending frequently. I have some query related to variation as
given below.
In a Fixed Price Lump sum Contract, we are MEP sub contractor. I am facing
the following ;
Problem 1 : At the time of tender , Drawings for Chillers equipments was given , in
which all capacity of chillers & operating parameters was also given. A Submittal was
also made for chillers which was duly approved by consultant. We made the shop
drawings as per specs & others requirements and consultant approved all the shop
drawings & capacity for chillers. Clients, Consultant and Contractors representatives
visited USA for the purpose of Inspection of chiller factory. All works were executed as
per shop drawings. After testing and commissioning, the building was handed over to the
clients. But now the Client is claiming that the contractor has installed over capacity
chillers which is not as per requirements. We installed the Chillers of same capacity
which was given in tender documents and by consultants approval. Client is saying that
checking of capacity of chillers and pump is MEP Contractors responsibility. On the
basis of above, Client is deducting the payments for rectification for the same from MEP
Contractors bill. Now in this whole scenario, Consultant is not giving any comments &
they are keeping quite. Now my question is; Can Client deduct the payments for the
over capacity of chillers. Is there any clause in FIDIC 1987. Please give your
valuable suggestions.
If there is a specific requirement clearly stipulated in the Contract for the MEP contractor
to verify and establish the actual capacity required (despite a capacity being already
referred to in the Contract), then he is under an obligation to do that. He would be in
breach of contract for not doing it and consequently the Employer would be entitled to
damages (i.e. the cost of putting things right). Also under Sub-Clause 39.2 the Employer
can deduct such costs, if the MEP contractor does not remedy his breach, after he I
instructed to do so. Approval by the consultants generally does not relieve the contractor
of any of his obligations.
Problem 2 : Pumps were selected for water flow & particulars head:
In the tender drawings the proposed head was given 130 ft. But we ( Contractor )
calculated the head and we proposed the head should be increased from 130 ft. as shown
in tender drawings equipments details to 160 ft. keeping the water flow as per tender
drawings. Consultant has approved all shop drawings and capacity of pump. All works
were executed as per shop drawings. After testing and commissioning, the building was
handed over to the client. After 6 months some overflow problem is coming on the
project. Now the client is claiming that contractor has installed over capacity pump.
Again we checked our calculation and we found that there was an error in calculation.
This resulted in selection of oversized pump having higher KW rating. In actual
calculation the head should be 90 ft. even less than the head given in the tender
documents. The client is now insisting on putting additional electrical equipments to
bring down capacity without extra cost to him . In addition, he is claiming the deduction
for higher capacity pump switchgear, increased band size, pipes & other connected
accessories. Can Client deduct the payments for the over capacity of Pumps. Is there
any clause in FIDIC 1987. Please give your valuable suggestions.
If according to the contract documents, the contractor has the obligation to check the
required head, then the answer is similar to above. If no such obligation is stipulated, then
the Contractor is in default for changing the specified Head and therefore the above
answer is still valid.
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 & Regards,

Rabbay Alam
Chase Developers ( ME ) LLC.
From: Ganeshan Kanthalu [mailto:[email protected]]
Sent: Wednesday, January 27, 2010 4:24 PM
To: Prof.Sam
Subject: SCA Alumni -QA
Dear Prof. Sam,

Happy and Prosperous New Year 2010.
I am grateful to you Sir that your course, instructions and Q&A advise helps a lot for the
QS Professionals. Like a GURU you are guiding the people engaged in QS profession in
UAE and other Gulf Countries in Middle East.
A Project Phase 1consists of Building works constructed by Contractor A and the
Infrastructure works executed by Contractor B. (Phase 2 Project consists of Building
Works constructed by Contractors C & D and Infrastructure works by the same
Contractor B. Phase 2 will be completed after 6 months. Phase 1 & Phase 2 are separate
Contracts with various start and completion dates & exg. roads are dividing them.)
The Project Phase 1 had been completed and approximately 65% of the Villas are
occupied and the Infrastructure Contractor requests for DLC. Practically works are
completed handing over also finished.
Can the Engineer issue the Defects Liability Certificate for Phase 1 in the absence of
final account completion? ( Delays due to late submissions by Contractor and Very Late
approvals by Client. Also to finalize the Varied works the Engineer recommended his
new rates and expecting the Clients Approval so that the Engineer can release 100% of
Varied Amount.)
Under FIDIC forms of contract, final account is not a prerequisite for the issuing of DLC,
and therefore DLC can be issued. But in some bespoke contracts, parties (mostly the
Employer) include such a requirement and therefore you have to check your contract in
this regard.
Regards,
Prof. Sam.

Please help me in deciding this issue.

Yours Faithfully
KS Ganesan AAIQS ICECA ACIArb
Senior Quantity Surveyor, AECOM
From: Joseph Ligin [mailto:[email protected]]
Sent: Thursday, January 28, 2010 7:41 AM
To: Prof. Sam
Subject: UAE Federal Civil Code
Dear Sir,
Where I can get the soft/hard copy of the UAE Federal Civil Code
Please advice
There is a copy of a translation available at the Dubai Chamber of Commerce Library, but it is
advisable to contact your company lawyers and get a copy that they recommend (probably the
one they are using in their office). At the library, there is a facility to photocopy (Dhs. 1/- per page
A3 or A4). We discuss during CA-AC the unreliability of translations.
The Articles from the Civil Code relevant to termination of contracts are available in the CA-AC
handout. Next CA-AC class is scheduled to be held in Dubai Feb 20 th-25th (6 evenings 6.30pm9.30pm). There may not be another class for sometime.
Regards,
Prof. Sam.

Regards,
Ligin Joseph
Asst. Commercial Manager
Al-Futtaim Carillion L.L.C.

----- Original Message ----From: ehab esmat
Date: Tue, 26 Jan 2010 10:50:50 +0000
Subject: Question
Dear Dr. Sam,
Kindly clarify what is the difference between "Joint venture" and "Consortium" between
two or more companies.
A consortium is an association of two or more parties with the objective of participating
in a common activity or pooling their resources for achieving a common goal. A
consortium is formed by contract, and each party retains its separate legal status.
A joint venture is an entity formed between two or more parties to undertake activity
together. The parties create a new entity by contributing equity.
Therefore, a consortium need not be registered or incorporated but a joint venture should
be registered or incorporated as a separate entity. More details in CA-MC.
Regards,
Prof. Sam.

Regards,
Ehab Essmat
B.Eng., PMP, MCIQS.
Senior Quantity Surveyor- P112

El Seif Engineering Contracting Co. Ltd.
Riyadh Saudi Arabia
----- Original Message ----From: Mohammad feroz

Date: Mon, 25 Jan 2010 10:26:20 +0530
Subject: valuation of Variations
Dear sir,
how to evaluate variations if discrepency in BOQ Quantity and contract drawings
quantities are different.

Case 1 BOQ quantity for Internal Plaster = 1000.00 m2 but after awarding of contract we check
the contract drawings and found that actual quantity for same is 2000.00 m2.
After some period consultants given an instruction to delete part of internal plaster as an
omission of works, when we measured that area we found that this quantity is 1200.00
m2 which is more than the BOQ quantity so in such case what is fair way to evaluate the
variation for this particular item.
BOQ qty. Internal Plaster - 1000.00 @ 45.00/m2 = 45,000.00 DHs.
Tender Drg. Qty - 2000.00 m2
Omission Qty - 1200.00 m2
In the above case there was provision in BOQ that tenderer are allow some items or
amount missing to complete the works but tenderer has not priced any amount against
this provision.
As discussed during the first Session, because the provision to price errors / missing
items was available in the tender documents, the tender/contract rate of 45.00 is
applicable and therefore the omission should be valued as 1,200 x 45/-.
Regards,
Prof. Sam.

Thanks with Regards,

Feroz
From: ahmed dajani [mailto:[email protected]]

Sent: Saturday, January 23, 2010 3:05 PM
To: Prof. Sam
Subject: Question
Dear Prof. Sam

This is my question:
We have been awarded a re-measured contract for a certain amount and in the letter of
acceptance the employer informed us that there will be a reduction in the total amount of
certain items totaling about 18.9% due to budgetary constraint.
We signed the contract for the total amount (without the reduction) and submitted our
bank guarantees for the total amount as well.
The employer changed contract conditions clause 12.3 to read
(a) (i) 25% instead of 10% Qty changed
(ii) 25% instead of .01% of total contract price
(iii) delete in its entirety
Pls. advise if we can claim for time extension and prolongation cost
You appear to be referring to FIDIC 1999 which is a very complex contract when
compared to FIDIC-4th Edition. In CA-AC we discuss all these problems in detail. SubClause 12.3 does not have any effect on Extension of Time. Therefore under the EOT
provisions in the contract your entitlements remain unchanged. When we come to the
question of Prolongation Costs, though one would try to use 12.3 to claim such costs (as
we do in FIDIC-4th through 52.2) this is not the correct practice, because prolongation
costs cannot be brought under the ambit of 12.3. The reply to your question is very
complex and cannot be dealt within this short Q&A forum. We discuss this issue over
some 2 hours in the CA-AC. The short answer to your question is that your entitlements
to EOT and Costs are not affected by the Clients modifications to 12.3
Regards,
Prof. Sam.

Thx
Ahmed M. Dajani

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My comments are given in red below :From: Rabbay Alam [mailto:rabbayalam99@rediffmail.

Arbitrator / Mediator - London Court of International Arbitration

Thanks & Regards,

Dear Prof. Sam,

Arbitrator / Mediator - London Court of International Arbitration

Please help me in deciding this issue.

Arbitrator / Mediator - London Court of International Arbitration

Al-Futtaim Carillion L.L.C.

Arbitrator / Mediator - London Court of International Arbitration

B.Eng., PMP, MCIQS.

Senior Quantity Surveyor- P112

----- Original Message ----From: Mohammad feroz

quantities are different.

Arbitrator / Mediator - London Court of International Arbitration

Thanks with Regards,

From: ahmed dajani [mailto:[email protected]]

Dear Prof. Sam

Arbitrator / Mediator - London Court of International Arbitration

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