The document is a collection of responses from Dr. Sam to various queries sent by alumni of the class of Autumn 2007. The responses provide clarification on topics such as price escalation clauses, extensions of time, definitions of plant and equipment in different contracts, insurance requirements, and liability for delays in commissioning subcontracted works.
The document is a collection of responses from Dr. Sam to various queries sent by alumni of the class of Autumn 2007. The responses provide clarification on topics such as price escalation clauses, extensions of time, definitions of plant and equipment in different contracts, insurance requirements, and liability for delays in commissioning subcontracted works.
The document is a collection of responses from Dr. Sam to various queries sent by alumni of the class of Autumn 2007. The responses provide clarification on topics such as price escalation clauses, extensions of time, definitions of plant and equipment in different contracts, insurance requirements, and liability for delays in commissioning subcontracted works.
The document is a collection of responses from Dr. Sam to various queries sent by alumni of the class of Autumn 2007. The responses provide clarification on topics such as price escalation clauses, extensions of time, definitions of plant and equipment in different contracts, insurance requirements, and liability for delays in commissioning subcontracted works.
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Dear Class of
Following are some questions sent by the alumni of the class of Autumn 2007 and my replies thereto, which you may find useful. Regards, Dr. Sam. Dr. Indrawansa Samaratunga PhD, DSc FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng Chartered Quantity Surveyor and Registered Arbitrator / Expert Australian Inst.of Qty.Surveyors-Middle East Representative PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Dear Mr. Yogesh,
My comments are given in red below :----- Original Message ----From: yogesh thirukonda "yogeshte@gmail.com" To: sam99@eim.ae Date: 2007-10-17 Subject: Request for Clarification. Dear Sir, Further to the CA sessions I've attended, I humbly request you to reply for certain queries listed below 1. Price Escalation: Can the contractor be eligible for price escalation for cement which is used in the concrete works in a remeasured contract? We as consultants are not paying the escalation as the contractor purchases the concrete as a product from suppliers similar to the like of concrete blocks. Is that correct? If the Price Fluctuation Clause is active in the Contract and/or the parties have agreed to adjust the Contract Price by any fluctuation in the Cement Prices, then such adjustment should be applicable not only for the Cement purchased for the Works but also for Cement Products purchased for the Works. 2. Extension of Time: There is a situation that a phenomenal delay for a multimillion phase of project, is caused by a small Nominated sub contractor(Fit out package); due to his non performance even after the Main Contractors Project Completion date of the particular phase. Snags are listed by the consultants and the same is being rectified by the NSC as a result the Client is not taking over the works. There is no EoT claim by the NSC till his contract completion date in the Contract, but they have recently put up claim(after 6 months of the scheduled completion date in the Contract) for Extension of time with prolongation cost . Incidentally the NSC is at-large ( ? ) in different occasions. Kindly advise me on a best possible way for a Consultant to save money ( ? ) with above issue. If the NSC is eligible for Prolongation cost should there by any profit added to it. Question is not clear. If what you mean by saving money is to reduce the Employers losses, then try to advise the Employer to take-over the Works so that Revenue Generation starts as soon as possible and let the NSC complete the snags during the Defects Liability Period. (i.e. if the Employer does not want to penalize the Main Contractor who is responsible for all defaults of the NSC. Otherwise there is no loss to the Employer because he can deduct LDs/Penalties from the Main Contractor) How can the NSC get EOT/Costs if the defects are due to his fault ? Question is not clear at all. 3a. POMI I remember that you were telling in the seminar that there is nothing called contractor's Plant, all machineries used for the temporary works for the Contract are to be termed as Equipments; Yes, that is if the Contract is FIDIC 4th Edition
POMI (1979) on other hand terms as Constructional plant Note the use of the lower case p in plant under Section A5-General requirements and the preambles in the Contract do also refers Plants, (preamble writer should be careful in using the correct p)Kindly clarify Plant and plant in these two instances are significantly different and would not cause any confusion. 3b. There is a structural slab for 1.2 m thick with several openings less than 1m3 for ducting and /or for other purposes. As per POMI "Voids" less than 1m3 are not to be deducted but in this given case no of "Openings" cause a substantial concrete quantity; should we also not deduct the openings in this case?,(You can deduct them by introducing a qualifying statement in the Preamble to this effect. Also remember to state whether formwork would me measured or not for such voids) there is also a say in the POMI that Voids caused by boxed or tubular structural metal work shall always be deducted, To this too the less than 1 m3 rule applies. Kindly clarify and is there difference between Void and Opening Yes but the rule applies to both. 4. Insurance for works There is an instance that the main contractor has executed and completed the contract ( small contract for 2 months ), without taking no insurances. Fortunately, there was'nt any accident as it was a very small internal work. Should we still pay for the insurances to the Main contractor in the preliminaries of a Lumpsum contract type. If a damage occurred, would the Employer have borne the costs thereof or asked the Contractor to bear the costs ? Therefore, since the care of the works was always the Contractors responsibility, the Contractor assumes the risk/liability whether he insures or not. Consequently it is fair to pay the Contractor his Lump Sum without any deductions. Regards, Dr. Sam.
Dr. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng Chartered Quantity Surveyor and Registered Arbitrator / Expert Australian Inst.of Qty.Surveyors-Middle East Representative PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Kind Regards T.E.Yogesh, Dear Mr. Jammal, My comments are given in red below:Dear Dr. Sam, The client has nominated a tile supplier. What recourse is there for late supply in terms of the tender documents? There should be a penalty clause in the Nominated Supply Contract. The tile supplier is falling behind and is unable to submit a delivery schedule for the tiles and there is a great concern. -Now the contractor is pointing the finger that the client has nominated the tile supplier. The Contractor had the opportunity to object to the nomination, if the Supply Contract did not carry a back-to-back penalty Clause. If the Contractor did not object, then he is deemed to have accepted to ensure timely delivery from his Supplier. -The fact the delay is happening and might have to get another supplier is it not the responsibility of the contractor to take necessary measure? Yes. It is the Contractors responsibility. -The Main contractor is not taking any pro-active measures with the supplier .
-Is there any responsibility on the client under the FDIC law? No. Regards, Dr. Sam
Dr. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng Chartered Quantity Surveyor and Registered Arbitrator / Expert Australian Inst.of Qty.Surveyors-Middle East Representative PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
Thank you __________________________ Ahmad Jammal Project Director
Dear Ms. Nafeesa,
My comments are given in red below:-
Dear Dr. Sam,
Thank you very much for your cooperation with regards to the queries sent by all your students. I too have one query. We had a subcontract of Dhs. 730,000 with the Main Contractor for the supply , supervision and commissioning of some HVAC equipments and it so happened that we were delayed in the commissioning of these units for which the Main Contractor sent us continuous reminders to finish of the commissioning and we could not do it because we were were awaiting for some cables to arrive from UK. In the mean time the Main Contractor on his own performed the commissioning and now he has backcharged us for Dhs.850,000. I would like to know what is the liability we can argue contractually. Depending on the provisions of the Subcontract, your company could be liable for more than delay penalties. Despite warnings, if you were late in commissioning, then the Contractor can undertake the commissioning either himself or through a third party, at your cost. Of course, he would have to demonstrate that he undertook all reasonable measures to keep such costs at fair and reasonable levels (such as by obtaining 3 competitive quotations etc.). To find out whether your liability could exceed your Subcontract Price, under the UAE law, you will have to seek a lawyers advice. Looking at the figures, you have given above, it is unlikely that the Contractor exercised his obligation to mitigate the costs (of commissioning through a third party). As the Claimant, he has to prove those costs, and you can ask for such proof. Regards, Dr. Sam. Dr. Indrawansa Samaratunga PhD, DSc FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng Chartered Quantity Surveyor and Registered Arbitrator / Expert Australian Inst.of Qty.Surveyors-Middle East Representative
PO Box 23461, Dubai, UAE. T +971504588949 F +97143378668
