MADAWALABU UNIVERSITY

Department of Construction Technology & Management

Contract Administration Semester Project

Maximum Group size: 4 members

Any Coping is strictly forbidden

Maximum Mark: 30%

Submission Date: May 22, 2005

Problem A

1.1 Contract
Part of the contract comprised laying a sewer crossing a main road on an embankment. There
was an old brick sewer in the embankment but its line and level were not known accurately.
The new sewer was to pass beneath the old one. The section below the embankment had to be
constructed in heading (tunnel).

The documents comprised drawings, specification, FIDIC4 Conditions of Contract, NCT

Conditions of Particular Application, Bills of Quantities totaling ETB61,917,995.

Start Date 19 February 2001; Time for Completion 17 months.

1.2 Events
While driving the heading below the embankment, there was a collapse in the roof and it
became apparent that the old sewer was close above the heading and had fractured. The
heading was flooded. The RE was advised and went to the site immediately.

The Contractor had some pumps but water was entering the heading as quickly as it was being
pumped out. The Contractor asked the RE for instructions. There was a manhole upstream of
the fracture. The RE instructed the Contractor to block the exit from the manhole and to pump
the effluent about 100 meters to a manhole in the new sewer. The old sewer could then be
repaired from below and the flow reestablished.

The Contractor carried out this work but no variation or confirmation in writing was issued. The
Contractor neither confirmed to the RE in writing the instructions received orally nor indicated
any intention of making a claim.

The repair was completed and work on the new sewer proceeded. The Contractor notified his
insurance company and claimed the cost of the work:

Temporary work in the relief drain and pumping sewage 170 000
Pumping and clearing the heading 42 500
Breaking out the damaged sewer and repairing it 408 000
Reinstating embankment to prevent subsidence to sewer or road 140 250
Delay to the works (approximately six weeks) 425 000

Total 1 185 750

The insurance company denied liability on the grounds that it had not been informed at the
time; that the damage had been caused by faulty design as the new sewer was too close to the
old one and could not be constructed without damaging it; and/or failure by the Employer or
Engineer to locate the sewer properly; and/or the work was done on instructions from the RE.

The Contractor then presented the claim to the Engineer.

Contractor to Engineer 14th August 2001

We refer to the damage to the existing sewer beneath the embankment. We enclose our claim
for the work done and the costs incurred.

You will remember that, when the damage occurred, we immediately informed the Resident
Engineer, who visited site and issued instructions as to what he required us to do. We followed
those instructions and completed the work to his satisfaction, so far as we are aware.

We now claim reimbursement of the costs and expenses involved on the grounds that the
damage was caused by the new sewer being designed to pass too close to the old one such that
damage to the latter was inevitable.

We also point out that, at the time of tender, there was no information on the drawings as to
the location of this sewer. We contend that it was not practicable for us to obtain any more
information about this in the time allowed for tender.

What are the principles on which the claim is based?

How would you respond to this letter and why?

Problem B

A contract under NCT rules includes the construction of 3 bridges. The completion date for the
whole of the works was extended to 17th November 2005. The works were not completed by
that date.

On 22nd May 2006, the Employer approved the issue of a variation to the Contract for additional
works for the construction of approaches to both sides of one of the bridges.

The Contractor has requested 90 working days to complete the additional works. The works
were actually completed in 90 calendar days.

There is also a requirement to carry out excavation in rock, which is completed in 30 calendar
days.
The Engineer has recommended that Liquidated Damages should be deducted for the period
from 17th November 2005 to 22nd May 2006.

Questions

What conclusions can you reach based on the information given above?

What additional information do you require in order to make a clear determination of the
extension of time that should be granted to the Contractor?

Which clauses of the Conditions of Contract and Conditions of Particular Application are
relevant?

Problem C

Contract

The contract was for the construction of a number of buildings on an extensive site and
included landscaping with provision of topsoil, turfing, seeding and planting of trees.

Documents comprised drawings, Bills of Quantities, FIDIC4 Conditions of Contract, specification.

Contract Price ETB38,506,785. Time for Completion 21 months.

Landscaping Bill of ETB3,560,140 includes one PS of ETB425,000 and a second also for
ETB425,000 for trees and shrubs followed by an item for general attendance at ETB25,500 and
another for profit of 5%. A Preamble to the Bill stated that:

The topsoil generally is to be obtained from material obtained on site and dumped in
temporary spoil heaps. Should the quantity be insufficient to meet requirements, the Engineer
may direct the Contractor in writing to obtain topsoil from elsewhere. Payment for such
additional topsoil shall be made at the rate for Item L 10 F (which was priced at ETB255/m3).

Events

Work was subject to a number of delays as a result of a large number of variations; particularly
inclement weather; delay in the diversion of services by statutory authorities; and prolonged
labour problems. Instead of being completed in August 2001, work was not even substantially
complete until April 2002. This was too late for turfing and seeding and too early for planting
shrubs and trees. The Engineer issued a variation excising the whole of the landscaping from
the Contract and let a separate contract to a specialist contractor for the work to be carried out
the following year.
Engineer to Contractor 21st March 2002

Variation No 143

You are hereby requested to omit the whole of the landscaping work included in Bill L and also
the associated earthworks in Bill B and drainage in Bill D as indicated on the attached key
drawing.

Contractor to Engineer 11th September 2002

We refer to Variation No. 143 dated 21st March in which you ordered the omission of the whole
of the landscaping works as well as some earthworks and drainage.

We notice that another contractor has appeared on site and has commenced erecting an office
and site facilities.

Although we have little work remaining, we are still technically in possession of site and we
must protest at another firm being given access without reference to us.

We reserve our rights regarding any damage that may occur to the work carried out under our
contract.

We understand that this firm is to undertake the landscaping, earthworks and drainage works
omitted from our contract. Therefore, we reserve the right to claim compensation for lost
overheads and profit on this work.

Engineer to Contractor 14th September 2002

We draw your attention to Clause 31.1 of the Conditions of Contract under which you are
required to provide facilities for other contractors. Work on your contract should have been
completed some months ago and you should have left site before now.

Regarding your right to claim compensation, your attention is drawn to Clause 51.1 which
allows the omission of any work by variation and to Clause 52.1 relating to the valuation of
variations.

Contractor to Engineer 18th September 2002

We cannot accept your interpretation of Clause 31.1 of the Conditions of Contract. The
Contract contained a list of other contractors being employed directly by the Employer. The
landscaping work was not included. The Contract included a Provisional Sum for unspecified
landscaping works, which we expected to carry out ourselves; there is also a PS for the supply
of trees and shrubs, although their planting was measured; and there were earthworks and
drainage works included in other bills, which were obviously part of the works we were to
execute.

We are unable to accept your view of your powers under Clause 51.1; in fact we note that
Clause 51.1(b) allows the omission of any work unless it is to be carried out by the Employer or
another contractor.

You state that we should have been off site. However, we draw your attention to Variation No
154, which was issued on 10th September 2002, eight days ago. We formally request an
extension of time to 24th September to complete the work involved.

Engineer to Contractor 21st March 2002

We refer to paragraph 3 of your letter of 18th September. Variation No 154 is for a trivial
amount of work and would have been issued much earlier had it not been for delays for which
you are responsible.

The Engineer makes no reference to paragraphs 1 and 2 of the Contractor’s letter, possibly
after reconsideration or having sought advice.

The Contractor is correct about the Engineer’s powers to omit work. He is entitled to loss of
overheads and profit insofar as the omission of this work prevented him from recovering
overheads incurred and profit he would have earned.

How much is the Contractor entitled to in compensation?

The value of the earthworks omitted from Bill B is ETB120,530.

The value of the drainage works omitted from Bill D is ETB67,405.

Overheads are 22% and profit 5%.

Problem D

Contract

The contract was for the rehabilitation of a section of road and consisted of cut and fill with a
surplus of excavated material to be carted to spoil.

Documents comprised drawings, Bills of Quantities, FIDIC4 Conditions of Contract, specification.

Tender dated 13th February 2002 for ETB105,805,195. Acceptance of the tender was dated 23rd
April 2002. The Time for Completion was 24 months.

The volume of fill and compaction in embankments was measured to the profiles shown on the
drawings. The excavation for this fill was shown as the same quantity with no allowance for
bulking on excavation or recompaction in fill. The balance of the bench volume of excavation
was to be carted to spoil.

The contractor had to allow for his own assessment of bulking and recompaction.

Bill items included:

Excavate topsoil to a depth not exceeding 250 mm and stockpile 10 400 m3

for reuse

Excavate material other than topsoil or rock in cuttings for use in 254 800 m3
construction of embankments

Excavate material other than topsoil or rock in cuttings and cart to 101 200 m3
spoil

Fill and compact excavated material other than topsoil or rock in 254 800 m3
embankments

Events

There was a little more excavation in the cuttings than had been estimated. There was no
variation affecting the excavation and the volume of the embankments was unchanged.

About three weeks before the completion of the excavation, the Contractor wrote to the
Engineer.

Contractor to Engineer 20th September 2003

The excavation for this contract is almost complete and we estimate that there are
approximately 15,000 m3 of material still to be excavated. Our spoil disposal location is almost
full and will not accommodate this excess material. We shall have to locate another tip site.
However, the haul distance to the nearest available location is about 13 km compared to
1.6 km to the present site.

We intend to claim the additional cost of haulage.

Engineer to Contract 23rd September 2003

We note the concerns raised in your letter of 20th September. However, we suggest that
anything required to dispose of excavated material in excess of that required to construct the
embankments is your responsibility as there has been no variation requiring additional
excavation.

The Contract is quite clear that disposal of surplus excavated material to spoil is the
responsibility of the Contractor. We cannot accept your claim for the additional costs of
haulage.

What comments would you make on this exchange of correspondence and why?

Problem E

Contract

The contract is a services contract with a consultant awarded on 14th October 2005. The
purpose of the contract was:

To undertake a review of the design and contract documentation prepared by

another design consultant; and

To supervise the construction of the project as Engineer after it had been
tendered and awarded.

Events

During the first stage of the contract a disagreement arose between the Employer and the
Contractor.

It was originally intended to put the project out to tender in June 2006. However, in December
2006, the issue remained unresolved and the Employer sought outside assistance to review the
dispute and to give an opinion as to its resolution.

A degree of mistrust and animosity had developed between the parties as a result of the
dispute.

During the design review, the Contractor had identified a number of problems, which made him
unwilling to accept responsibility for the design on the grounds that it was inaccurate and
uneconomic. The Contractor recommended that the road should be redesigned and the tender
documentation and estimate adjusted accordingly.
This led to the issue at the root of the dispute. The Contractor believes that redesign on the
scale necessary is beyond the scope of the Contract and that he should be reimbursed for the
extra work involved in redesigning the road. The Employer believes that all necessary redesign
is included in the Contract and that the Contractor should carry out the full redesign without
additional reimbursement.

The Terms of Reference (ToR) define the objectives of the Contract as:

“To carry out a review1 of the detailed Engineering Design and Tender documents,
prepared by Consultant X in association with Consultant Y so that:

All necessary amendments2 are made and the consultant assumes

ultimate responsibility for the sufficiency and roundness of the designs
and tender documents;

In depth investigation of expansive soils is carried out by the consultant
and appropriate remedial measures incorporated in the final design and
tender documents; and

A complete set of tender documents is prepared on the basis of National
Competitive Bidding (NCB).”
The ToR define the scope of the review services as:

(i) The consideration3 of the:

• design assumptions, methods, data, calculations and technical specifications

• road capacity analyses, pavement and condition surveys, geotechnical
investigations and structural analyses
• drawings, plans, documents and proposed road alignment
• need for new structures and the proposed rehabilitation, strengthening and
widening of existing structures
• accuracy of topographical surveys, the positioning of reference beacons and
primary and secondary beacons
• construction material requirements, sources and sufficiency
• hydrological surveys, hydraulic calculations and designs
• land acquisition requirements
• analysis of slide prone areas
• tender documents
• project cost estimate
(ii) Geotechnical investigations for the following:
 • preliminary design of bridges
• detailed design of bridges
The invitation for bids specifically states that:

• "It is intended that the project road shall follow the existing road alignment
subject to cost constraints of alternative alignments"
• "The Detailed Engineering Design and Tender document preparation for the
proposed works have been done by Consultant X in association with
Consultant Y in 1999 G.C."
The Contractor’s proposal stated that he would undertake:
• a design review;
• an evaluation and review of survey data and setting out details;
• an evaluation of in situ materials and potential material sources;
• a foundation investigation for three bridges;
• an evaluation and review of the geometric design;
• an evaluation and review of the structural design;
• an evaluation and review of the tender drawings for construction purposes;
• a review of the tender documents for the works contract; and
• any other necessary services which will be negotiated and mutually agreed upon
at rates and conditions of the assignment.
Arguments
The tender documents do not specifically include the redesign of any or all of the road.
The Contractor’s proposal neither specifically includes nor specifically excludes the
redesign of any or all of the road.
The Employer argues that the primary objective of the services is to include all amendments
necessary to allow the Contractor to have sufficient confidence in the design to assume full
responsibility for it and that this is impossible unless all required changes are made to the
design. This may be the intent but the question of who should make and pay for the changes is
not clear.

The Employer also argues that the Contractor should make the changes and that he should
have allowed for this in his proposal. This raises the question of whether the Employer
expected all tenderers to include the cost of redesigning the whole of the road in their
proposals, considering that an international consultant had prepared the design.

The Contractor argues that the ToR require him only to review the design and either to assume
responsibility for it or to highlight problems that must be resolved before he will accept that
responsibility; which is what he has done. This might be contradicted in the Contractor’s
proposal, which stated under geometric review that, “…we shall review the detailed
design…and incorporate the approved amendments accordingly”. The Contractor says that
they had allowed for the changes necessary to accommodate minor amendments but not for
substantial redesign.

When the design was provided to the Contractor, it was evident that it was a draft design
rather than the “Detailed Engineering Design and Tender Documents” referred to in the ToR.

Although the Employer stated that a criterion for the design was that it should follow the
alignment of the existing road, the design under review only follows the existing alignment for
20 out of a total of 115 km. The Contractor argues that survey verification on an existing
alignment is easy, whereas verification of a survey on a new alignment, in places through virgin
forest, is far more time consuming and expensive.

The Employer argues that the Contractor must have anticipated design problems as he offered
to reinstate all GPS benchmarks and to verify levels over 70% of the route rather than over 30%
as requested in the tender and therefore must have allowed for the cost of doing so. The
Contractor responds that he anticipated difficulty in locating the benchmarks and that is why he
allowed for their reinstatement. He also stated that he did not anticipate any problem in
verifying DTM levels on an existing alignment and so was happy to sample 70% of the length.
However, neither of these points makes any statement about any commitment to carry out a
major redesign.

The Employer states that the Contractor has not undertaken certain of the tasks defined in his
proposal. The Contractor acknowledges this and counters that there seems to be little to be
gained by carrying out further work when he has already identified that substantial redesign is
necessary. He is also prepared to discount the cost of the uncompleted work from the cost of
carrying out the redesign.

Current Status

At the insistence of the Employer and with no agreement upon the redesign, the Contractor
submitted his Draft Design Review Report and Draft Tender Documents.

The report advised of the problems that had been identified and that the Contractor would not
accept responsibility for the design unless the redesign was carried out. The tender documents
could allow a tender to proceed but would require changes to be made when the redesign was
completed.

The Employer has neither accepted the Contractor’s refusal to assume responsibility for the
design nor the qualified documents and has instructed the Contractor to resubmit “…all
Engineering Documents…” duly amended to include all of the identified “…flaws and
shortcomings…”.
As a result, a meeting was held between the parties at which it was agreed that the Contractor
should submit a proposal to finalise the services.

The proposal was submitted on 4th September 2006. It was to resurvey the whole route,
redesign the vertical alignment, prepare construction drawings and update the tender
documents for a total of USD530,000 over 9 months.

The Employer responded on 26th October that this amount is exaggerated for the survey of the
balance of 30% of the route. The Contractor explained on 3rd November that the additional
cost included the additional work necessary to complete the redesign.

There has been no further communication between the parties.

Financial

The design review component of the existing Contract is USD430,000. The Contractor’s
redesign proposal is for USD530,000 over 9 months. A deduction of USD129,000 is offered to
compensate for tasks in the existing Contract, which were not carried out. Thus the effective
cost of the proposal is USD401,000.

The Contractor has indicated that he believes that redesign of the vertical alignment and the
possibility of reusing the existing bridges, rather than constructing three new bridges, will result
in significant savings over the estimates for the existing design.

He suggests that completion of the redesign prior to tender will reduce the probability of claims
from the construction contractor and will also limit his own specialist input during construction,
thus reducing the cost of the engineering services.

What comments would you make on this situation and why?

What are your recommendations to resolve this dispute?

PROBLEM F

Background
The Contractor submitted a claim for an extension of time predicated upon the assertion that
the Engineer has provided inaccurate survey data and that this has prevented the Contractor
from preparing cross sectional drawings, which he is obliged to do before commencing work.
Entitlement to an extension of time of 111 days is claimed from 3rd January to 23rd April 2007.
Claim
The Contractor states that, under Sub-Clause 17.1, he is required to set out the Works by
reference to beacons and benchmark data provided by the Engineer. The Contractor is
responsible for the accuracy of the setting out and of the finished work, provided that the data
provided by the Engineer is correct. If the Engineer has provided incorrect data, which results
in errors in the Contractor’s surveying, then the Contractor is entitled to an extension of time
and the reimbursement of any additional costs that he has incurred as a result.

There is an extensive exchange of correspondence between the Contractor and Engineer over a
prolonged period.

Contractor to Engineer 12/10/06

In a letter dated 12/10/06 the Contractor wrote to the Engineer stating that some beacons had
disappeared and other were displaced from their true position. This had caused problems with
setting out and cross section surveys. The Contractor was unable to locate RoW problems and
diversion roads owing to a lack of survey reference points and insufficient design data, such as
centreline coordinates at 20 m intervals.

In accordance with Sub-Clause 6.3 of the Conditions of Contract and 1204 of the Standard
Specification, the Contractor requested the Engineer to provide GPS and benchmark locations
along the alignment and design data for centreline coordinates at 20 m intervals and for
widenings. The Contractor warned of delay and disruption that might occur if this information
was not made available.

Contractor to Engineer 21/11/06

In a second letter dated 21/11/06 the Contractor states that a joint survey has been undertaken
with the Engineer’s surveyors and that discrepancies were found between the actual positions
of beacons and the data provided by the Engineer. The Contractor advised that he is unable to
commence surveying, setting out and the preparation of cross sections because of this. He
requested clarification and instruction from the Engineer in accordance with Sub-Clause 6.3 of
the Conditions of Contract.

Engineer to Contractor 24/11/06

This letter refers to 2.2. It stated that the Contractor is solely and fully responsible for the
accuracy of all survey work. The Engineer said that beacons displaced from their true positions
are in fact missing and that Sub-Clause A8 of the Project Specification places the onus upon the
Contractor to replace beacons missing during the construction period.

The Contractor was responsible for the execution of the survey works and should fulfil his
contractual obligations.
Contractor to Engineer 28/11/06
In a letter dated 28/11/06 the Contractor refers to a letter from the Engineer dated 24/11/06.
A copy of the Engineer’s letter has not been provided. The Contractor acknowledged that he
had received setting out data.

However, he maintained that the Engineer was responsible for ensuring that the data provided
to the Contractor for reference survey beacons was accurate, although the Contractor was
responsible for protecting the beacons during the construction period. He asserted that, under
Sub-Clause A8 of the Project Specification, the Contractor was responsible only for reinstating
any beacons that became missing during the construction period.

He requested confirmation that the beacons were intact when the notice to commence and the
contract drawings were issued. He asks the Engineer to substantiate that beacons were
disturbed during the construction period and not before the site was handed over.

The Contractor noted that he is required to supply cross sections of the existing road before
construction work commences. He suggests that the construction period starts when
construction commences, so all beacons should have been in place and accurately located prior
to this.

Referring to Sub-Clause 6.3, the Contractor required clarification and instructions to reinstate
the beacons that were incorrect at the time of handover. He asked particularly for
confirmation of the parts of the Site that had been handed over; details of the existence and
accuracy of the benchmarks to be used; and confirmation of any information that had not been
provided but was necessary for completion of the Works and when that information would be
provided.

He stated that he could not start the construction of the permanent works until this
information was provided.

Engineer to Contractor 03/12/06

Refers to Contractor’s letter dated 21/11/06. States that some of the beacons referred to by
the Contractor are not from the design drawings and states that there are no problems with the
beacons shown on the drawings.

Engineer to Contractor 04/12/06

Refers to Contractor’s letter dated 28/11/06. States that there are no problems with the
beacons shown on the drawings.
Engineer to Contractor 06/12/06
Draws the attention of the Contractor to Sub-Clauses A8 and B1204 of the Project Specification
and says that both clauses clearly state that the Contractor is responsible for replacing any
missing beacons and for ensuring that all have the correct coordinates. Any delays are the
Contractor’s responsibility.

Engineer to Contractor 15/12/06

Refers to Contractor’s letter dated 08/12/06 a copy of which is not provided. Rejects
Contractor’s statement that Engineer’s senior surveyor agrees that there is a problem with the
GPS benchmarks.

Notes that a meeting was agreed for 13/12/06 but Contractor’s surveyor did not attend.

States that neither the Employer nor the Engineer is responsible for the accuracy of the survey
data provided to the Contractor. Says that the contract documents make it clear that the
Contractor has to satisfy himself about the availability and accuracy of the GPS benchmarks.

Asks for details of missing information required by Contractor.

Says that the Contractor has had access to the site to do survey work from the commencement
of the contract and that access has not been denied at any time. Thus there is no reason not to
continue the contractually required survey work.

Refers to Standard Specification 1204, Project Specification B1204 and A8 and says that these
make it clear that the Contractor shall check all beacons and satisfy himself that they are
undisturbed and true for position and level. If they are not or are missing, it is the responsibility
of the Contractor to replace the beacons. He alone is responsible for the accuracy of all survey
work on site.

Requests CV and qualifications of surveyor.

States that Contractor is unwilling to accept his responsibility and that any delays are his fault
and that no claims will be considered.

Instructs Contractor to replace any missing benchmarks to the accuracy required by the
Employer.

Contractor to Engineer 24/12/06

The Contractor stated that the Engineer’s senior surveyor has not provided the Engineer with
the correct information and that this has resulted in considerable delay to the project. He
stated also that the Engineer has paid no attention to the discrepancies the Contractor has
raised and has not visited site to acquaint himself with the problems. The Contractor took a
number of actions to satisfy the Engineer’s surveyor’s objections. He has brought a different
surveyor to site; he has checked the calibration of the surveying instrument; and he has applied
a scale factor. In spite of this, the problems remained unresolved.

The letter said that the Contractor had again checked the instrument in the presence of the ERA
counterpart engineer and also had reviewed the application of the Grid factor. These actions
had confirmed that the instrument was accurate and also had revealed an error in the
coordinates provided to the Contractor of 13 mm in 150 m, which exceeded the tolerance
allowed by ERA of 9 mm in 600 m. The Contractor disputed the values of the grid factors used
by the Engineer’s surveyor.

The Contractor undertook a joint survey with the Engineer’s surveyor from P000 to P101 over
4 km. This revealed an error of over 1 m in 4 km. The Contractor concluded that this
demonstrated an error in the survey control points and requested urgent clarification and
instruction from the Engineer so that the permanent works could proceed.

The Contractor referred to Sub-Clause A8 of the Project Specification, which states that
beacons have been established along the route and that the Contractor shall use these for the
execution of the Works.

The letter concluded by saying that the project will be severely delayed if the problems are not
resolved quickly.

Engineer to Contractor 27/12/06

Refers to all previous correspondence concerning survey issues. States that any instructions
from the Engineer must be implemented by the Contractor.

Rejects accusations of bias and quotes visit to site and meeting arranged for 13/12/06, which
was not attended by Contractor’s surveyor.

Notes that Contractor agreed to consult an independent surveyor and to involve the surveyor
from Contract 2 and requests written assessments from both for evaluation and further action.

Requests details of checking of total station over past six weeks.

States that Contractor’s surveyor agreed that GPS points checked jointly after a meeting on
21/12/06 are sufficiently accurate and meet the required standards. Therefore there is no
problem with the GPS points used in the traverse.

Contractor to Engineer 01/01/07

He refers to the Final Designer’s Survey Report, which was received on 27/12/06.
The Contractor stated that the report contained considerable errors when compared with the
design data in the contract documents and concluded that there were problems with the GPS
control points from Azezo to Metema.

He again requests instructions and clarification so that construction work can proceed. He
noted that three months had elapsed since the date of commencement.

Engineer to Contractor 17/01/07

This is a letter from the ARE and refers to a visit to the site by design and survey experts from
the Engineer’s head office. It states that most of the design levels given on the drawings are in
error because of problems in surveying the cross sections during design. The design data could
be used by changing the levels of the GPS points. New levels were given for four points.

Contractor to Engineer 20/01/07

The Contractor states that the ARE’s information is insufficient and again requests instructions
and clarifications.

The Contractor also requested that the Engineer determined an extension of time and
additional costs in accordance with Sub-Clause 6.4.

Engineer to Contractor 23/01/07

The ARE gives new levels for two more GPS points. He states that everybody knows that there
are problems with the design levels and that this has been confirmed by the survey and design
experts. The x and y coordinates of the GPS points will remain unchanged as the change in
elevation of a few metres will have a negligible effect upon the Grid Factor calculations. He
advises that the information provided is sufficiently accurate and that the Contractor should
continue with surveying without delay.

Engineer to Contractor 07/02/07

The Engineer quotes Conditions of Contract Sub-Clause 17.1; Standard Specification
Sub-Clause 1204; and Project Specification A8 and B1204 to establish that the responsibility for
surveying is wholly the Contractor’s.

He quotes Conditions of Contract 13.1 that the Contractor shall comply with and adhere strictly
to the Engineer’s instruction and states that the Contractor has been issued with numerous
instructions to verify and/or replace GPS control points and to carry out the cross section
surveys but that the Contractor has failed to comply.

He says that the Engineer has exceeded his contractual obligations by verifying that the GPS
points are sufficiently accurate for the Works to proceed and by providing updated design data
(adjusted GPS elevations) to allow the cross section survey to proceed.
He instructs the Contractor to implement his instructions immediately.

He warns that he may request the removal of the Contractor’s Project Manager under
Conditions of Contract 16.2.

Contractor to Engineer 13/02/07

The Contractor recorded the Engineer’s endorsement of the adjusted elevations issued by the
ARE on 23/01/07.

He stated that this has affected only the level problems and that the discrepancies in the
coordinates still existed and that setting out from different beacons resulted in different points
being located for the same location.

The Contractor advised that he would do the setting out again as instructed but that this would
entitle him to an extension of time and additional costs.

He requested that a meeting be held on site to resolve the issues.

Contractor to Engineer 23/02/07

He considers that Conditions of Contract 17.1 only requires him to set out in accordance with
the line and levels given in the contract drawings. He reiterates the notice of discrepancies and
under Conditions of Contract 6.3.

He advises that he will employ an independent surveyor to resurvey the GPS controls and that
he will be entitled to reimbursement of the costs if the survey confirms the discrepancies.

Contractor to Engineer 13/03/07

The Contractor provides details of the GPS points established by the independent surveyor and
a comparison with the original data.

He advises that he proposes to start the setting out and cross section survey on 16/03/07,
making use of the elevation data provided on 23/01/07.

Engineer to Contractor 14/03/07

The Engineer advises that he commissioned an independent survey on GPS control points over
a 20 km section, which confirmed that the accuracy was well above that required for setting out
and cross section surveys, validating the Engineer’s position.

He says that this constitutes a final instruction to proceed with the cross section surveying on
pain of removal of the Contractor’s Project Manager.

All delays to date and any associated costs are the responsibility of the Contractor.
Contractor to Engineer 04/04/07
The Contractor provides cross section surveys over 15.4 km.

He requests details of revised elevation data for the next section as he will otherwise be unable
to continue with the cross sections.

Contractor to Engineer 16/04/07

The Contractor submits more cross sections and advises that he can now start the Permanent
Works.

Documents Relevant to Claim

The commencement date for the Contract was 1st September 2006. The first intimation of
problems with survey stations was in early October.

The Contractor repeatedly requested action by the Engineer to provide accurate survey
references for setting out and surveying cross sections.

The Engineer repeatedly stated that it was the responsibility of the Contractor to ensure that
the values given for survey beacons were correct and to replace any disturbed or missing
beacons. He instructed the Contractor to proceed with checking and replacing beacons on
several occasions but rejected any suggestion that he or the Employer bore any responsibility
for the accuracy of the information about the coordinates of the beacons provided to the
Contractor.

Contractual Provisions for Works Construction Contract

Conditions of Particular Application

Sub-Clause 29.5 requires that the Contractor shall not alter or damage any beacons. If he
considers that the execution of the Works may affect any beacon he shall notify the Engineer,
who shall arrange for its removal and replacement if he thinks it to be necessary.

General Conditions of Contract

Sub-Clause 6.3 requires the Contractor to give notice to the Engineer if planning or execution of
the Works is likely to be delayed or disrupted if the Engineer does not issue a drawing or
instruction within a reasonable time. The notice has to include details of the information
needed and also of the delay or disruption that is likely to occur if it is not provided within a
reasonable time.

Sub-Clause 6.4 allows for an extension of time and payment of additional costs if delay or
disruption results under Sub-Clause 6.3.
Sub-Clause 13.1 requires the Contractor to execute and complete the Works to the satisfaction
of the Engineer and to comply with and adhere strictly to the Engineer’s instruction on any
matter.

Sub-Clause 17.1 states that the Contractor is responsible for the accuracy of setting out and the
correctness of the positions, levels, dimensions and alignment of all parts of the Works. Any
errors shall be made good at the Contractor’s cost unless the error is based on incorrect
information provided by the Engineer in writing.

Standard Specification
Clause 1204 states that the Contractor is to satisfy himself that all reference and level beacons
have not been disturbed and are true. If any beacons have been destroyed or disturbed before
the Site was handed over to the Contractor, the Engineer shall arrange the installation of new
beacons. A beacon, which has been disturbed, shall not be used unless its true position and
level have been re-established and the new values have been verified by the Engineer.

If a beacon is likely to be disturbed by the execution of the Works, the Contractor shall establish
substitute reference beacons. The levels and positions of the substitute beacons must be
determined and approved by the Engineer before the original beacon is disturbed.

If any beacons are disturbed or destroyed during construction, they shall be replaced by the
Contractor.

Non Contractual Provisions for Works Construction Contract

Project Specification
Clause A8 states that beacons have been established along the route and that the Contractor
shall use these beacons for setting out and control of the Works. The positions and levels of
these beacons are shown on the drawings.

If any of these beacons are missing during the construction period, they must be reinstated by
the Contractor at his own cost.

The Contractor must supply the Engineer with cross sections of the existing road taken at 20 m
intervals before the construction works commence.

Clause B1204 modifies Clause 1204 of the Standard Specification so that the Contractor is
responsible for the replacement of any beacons that were destroyed or disturbed before the
Site was handed over. This removes the responsibility from the Engineer.

It is important to note that the Project Specification is not included in the documents listed in
either the Contract Agreement or in Sub-Clause 5.2 of the Conditions of Particular Application.
Provisions of Design Services Contract

Minutes of Pre Contract Meeting

Item 3 commits the Consultant to making survey references to the nearest possible available
national reference beacon. If none are available the issue will be discussed and agreed with
ERA.

Item 6 states that the Consultant will carry out surveying works to an accuracy complying with
ERA standards and accepted international practice.

Appendix A Description of Services

Sub-Clause 12.1 relates to topographical surveying. It states that the Consultant shall
undertake a detailed ground survey for detailed design and the estimation of quantities. He
will set out the centreline; level the longitudinal profile; produce cross sections; and establish
benchmarks.

The benchmarks shall be permanent concrete posts and shall be shown on the plan and profile
drawings as well as listed on a separate schedule.

The Consultant shall submit a topographical survey report.

Sub-Clause 12.7(iv)(a) requires the Consultant to prepare plans and profiles to scales of 1:200
and 1:2,000 respectively, which are to include the locations of benchmarks and survey beacons.

Provisions of Construction Supervision Services Contract

Appendix A-1 provides a Description of the Services to be provided by the Consultant.

Scope of Services
Section 3 of Appendix A describes the Scope of Services to be provided.

Paragraph (v) requires the Consultant to identify all survey ground control stations, which have
been established by the previous Consultants (the Design Service Contract Consultants) to
verify their accuracy and to re-establish any damaged or missing stations to enable the
Contractor to set out and construct the Works.

Paragraph (ix) requires the Consultant to approve the Contractor’s setting out of and
preparation for the Works before issuing approval for construction.

Questions to be Determined

Contractor’s Responsibilities
What were the Contractor’s contractual responsibilities for determining the coordinates of the
survey beacons before commencing work?
What were his responsibilities for replacing missing beacons?

Could the Contractor have commenced construction work using survey beacons of which the
coordinates were uncertain?

Engineer’s Responsibilities
What were the Engineer’s contractual responsibilities for replacing survey beacons that were
disturbed or missing before the Contractor was given possession of site?

What were his responsibilities for caring for beacons after the Contractor had taken possession
of site?

What are his responsibilities under his service contract with the Employer?

Design Services Contract

Have you any comment to make on the performance of the design contract?

Resolution of Claim
Is the Contractor entitled to an extension of time?

Is the Contractor entitled to additional costs resulting from delays to his programme of work?

Problem G

Problem

The Contract was for the reconstruction of a road in Ethiopia. The programme showed that
major works would be halted for three months from the end of June to the beginning of
October each year.

At the end of May and into June the Contractor constructed and completed lengths of
basecourse. The Contractor then started to lay asphalt binder and wearing courses.

The Engineer determined that the weather conditions were too wet to allow the Contractor to
lay asphalt and ordered him to cease the construction of the binder and wearing courses until
the weather improved. As a result, approximately 8 km of completed basecourse were left
unprotected for the duration of the wet season.

When the weather improved at the end of the wet season, the Contractor had to rehabilitate
the damaged basecourse.

The Contractor gave notice of and submitted a claim for the work involved in rehabilitating the
basecourse.
The claim was submitted in accordance with the requirements of Clause 53 of the FIDIC4
Conditions of Contract.

The claim was also linked to Sub-Clauses 2.5 [Instructions in Writing] and 13.1 [Work to be in
Accordance with Contract]. The latter requires the Contractor to comply with and adhere
strictly to the Engineer’s instructions on any matter.

The substance of the Contractor’s claim was that the Engineer had instructed him to stop laying
the asphalt binder and wearing course over 8 km of prepared basecourse. The Contractor had
complied with these instructions. Because the basecourse was not protected by the asphalt
layers, it had been damaged during the rainy season making it necessary for the Contractor to
rebuild the damaged basecourse at the end of the wet season.

The Contractor contended that the damage would not have occurred if he had been permitted
to complete the asphalt layers. The Contractor’s position was that the remedial work to the
basecourse was necessary only because the Engineer instructed him to stop laying asphalt.
Thus the Contractor was entitled to the additional costs he incurred as they resulted from an
instruction issued by the Engineer.

How would you assess and respond to this claim? What are your reasons?