Variation clause 51.1 b

Omer,

In my opinion, my answer to your questions are:

a. Yes, but it does’nt stop Contractor’s rights to claim for the expended direct costs (if any), Oh&P impacts, etc. (as per Clause 53).

b. Yes, considering the massive cost change. Its a company standard policy like yours, to solicit bids/quotations from Suppliers/Subcons (e.g. in accordance with corporate cost management bylaws). [Note: this answer is not based on provisions of contract].

Good day...

I appreciate your reply but point is that as per clause 51.1 (b) omitted work can not be carried out by Employer and another contractor. But in this case Span of the omitted work has been changed. So does it mean that clause 51.1(b) is not applicable for this case as span of the omitted work has been changed?. Kindly clarify this point for my understanding. I agree with this that you can not stop the contractor’s right to claim.

Second point is that price adjustment clause was included in the original contract to cover the risk of inflation. Moreover, clause 52.2 is also included in the contract in which Power of Engineer to fix the varied work. So there is no justification to delete the work because cost of the work has been increased.

While entering into a separate contract it seems that its against the spirit of the contract by deleting a part of work just because change in span. In this way existing contractor will get undue favour if he wins the Tender again. Secondly while entering in to a separate contract, Employer will bear the risk of existing contractor by awarding a contract on higher rates to some other contractor.

Regards,
Omer

Have a read!

http://www.constructionlawonline.com/CLebulletin/lowercols_ebul.html

Omer,

1)...So does it mean that clause 51.1(b) is not applicable for this case as span of the omitted work has been changed?.
Ans: No, this is applicable to that nature of change. The Contractor has stronger position to this clause (Engineer can’t dispute).

2)Second point...
Ans: This clause applies as pricing mechanics for variation, but not variation entitlement as in Clause 51.

3)While...
Pls. note that this is not a simple change of span only but increase of almost 400% from its original budget.
If Owner is willing to pay his damage liabilities, it is not opposing the spirit of contract.

And assuming I am on the Owner (Engineer) side, one of my prime objective was to deliver the project at the most minimum cost & time.

Therefore, to handle this issue in cost wise management approach, will be:
- Omit the 150m. bridge from your scope.
- Engineer or Owner will not dispute Contractor’s claim related to Clause 51.1b.
- Engineer or Owner will pay Contractor’s claim of his losses, incurred directs, related OHP, etc. related to omission.
- Omission issue and relative losses will be settled amicably.
[And if successful]
- Invite existing Contractor + new Contractor to quote for the 350m. bridge, to get the lowest cost.
- An ITB Option for existing Contractor is to give discount to Owner (e.g. waiving his claim, minimum mob. cost, etc.).

It would be better if you manage to negotiate to Owner in order award this 350m. bridge project to your Company, you need to convince them that you are the most advantage, specially cost.

As much as possible, both parties should end in win-win situation.

Good luck and Have a nice day...

Hi Andrew Flowerdew

thanks for informing a very knowledgable and learning article.

After going through an article and keeping in view the clause 51.1(b)of CoC part I, employer can only omit the work when employer considers that it is no longer required by the project. Now in my case I consider that 150 meter span bridge can only be omitted if existing contractor is not capable enough to construct 350 meter span bridge. Otherwise there is no justification to omit the bridge.

Regards,
Omer

Dear All,

My opinion, If that 150 m span bridge omitted in pursuant to clause 51.1(b)and that 350m span bridge could issue as variation to same contractor. Then that varied work nature or amount of whole of the Works or to any part changed in accordance to clause 52.2
Therefore, the rate and price shall be fixing in accordance to clause 52.2
Furthermore, potential contractor’s claim can be expected and you are required to demonstrate and advise to the Employer that contractual matter pertaining to Clause to 51
& 52 and other contractual implication and which is most viable

I agree with sathis Jayweera. but the issue is that, within the provision of clause, can employer omit 150 meter span bridge and then construct 350 meter span bridge through seperate tendering at same location????

In my opinion employer can not do this.


Regards,

Omer

Is the employer just varying the original scope - increase in quantity, change in character, change in quality, change in levels, line, position and dimensions ...., etc

Possibly clauses 51.1 (a), (c), (d), (e) and (f) are more relevant than (b).

I just describe the case again. Employer has decided to omit 150 meter span bridge from existing contract. Employer also decided that instead of 150 meter span bridge he will construct a 350 m span bridge through seperate open tender at same location. As a consultant of employer i recommend that Employer can only omit the work if it is not required by the project otherwise employer will face huge claims. In my opinion its better to include 350 m span bridge in existing contract through variation clause 51.1.

what do you recommend

Regards,
Omer

If the employer can’t find grounds to omit the work Cl51.1b has no relevance so the varied bridge must come under one or more of the other sub clauses, there’s quite a choice that appear to possibly apply.

Omar
Yes your are right, not nesscessry call for a tender. That clause 52.2 may serve the purpose of the client requirement.

Regards

Sathis Jayaweera

Sathis,

I’m just curious about your last reply, how can Clause 52.2 be used by Contractor to protect himself from possibility of Employer’s omitting then re-tender change of bridge from their scope?

Good day...

Larry,

Simple, Omitting 150m span bridge and adding 350 m span bridge is a variation. That varied 350 m span bridge need to be a valued in accordance with clause 52.2
Do not need re-tender. see Mr. Omar last reply


Regards,

Sathis jayaweera