descoping of work

Dear kamarudhen,

The first issue is that you have to approve the change order for the removal of the scope from your contract. The financial part will follow.

Even for a lump sum contract you will need a BOQ to price your contract. Hopefully this is prepared by your client and is priced by you (Contractor) and is included in the Contract Documents.

Your Overheads are the running costs (site and office) for this project. This you must pay wether you had this item or not. You will need to clearly provide the client with the analysis and supporting documents for these costs and the weighted percentage of this cost given to the item that was deducted from your scope. Or the client can approve the standard norm of the industry in your area.

Loss of profit from completing this item is another issue that you can claim. You will need to submit an analysis with the supporting documents for the cost of this item in your BOQ (if it exist). The client can negotiate this item with you.

Let us know if you have a more specific question.

With kind regards,

Samer

Kamarudhen,

It may surprise you but the starting point is that the contractor is still entitled to the full amount of his lump sum.

Lump sum contract - risk of quantities is usually with the contractor - if so, when they go up, contractor loses as he gets no more money, when they go down, contractor gains as he’s paid all the lump sum. Contractor took the risk, contractor wins or loses.

But that’s the starting point, possibly not the end point - more likely your contract is a lump sum that can be varied and you’ll have to refer to the variation clauses to find out exactly what happens and see if this situation is covered or not.

You said "Client awarded one particular item of work to another contractor after descoping from us in the very beginning of the Project" is allowed under your contract - from your statement it reads as if the contract was already signed before this happened and this will be significant.

what does descoping mean?

In layman language, Removal of some items from ur BOQ

Like say, u r doing a pipeline project of 200km. Client may "De-Scope" 50km and can award to some other contractor. This generally happens in this part of the world, if there is slow progress of works and contractor is not in a position to mitigate those delays

Cheers,

Alright Thanks Mr.Raviraj

Dear all,
as per tjhe general condition of contract clause 51,the employer/the engineer has no right to omit part of the original scope of work if the omitted wok is to be carried out by the employer or by another contractor.

the contractor can reserve his right and claim for all losses related to unauthorized vairation.

Ashraf,

U r correct in one way, but employer / engineer can reduce scope of works and can award to other contractor. The main contractor in this case can claim for his losses but then client will certainly claim LD’s on a/c of slow progress.

But, in this part of the world, normally contractors dont claim for this loss, as the works are huge and Client dont pay on time; Contractor dont have good contracting staff and end-up loosing scope of works.

Dear Raviraj Bhedase ,

in UAE,we have many cases the contractora are submitting the claims for omission of part of the original scope of works and it is not allowed to give the deleted parts to another contractor to do it .in some cases we are awaitting until the project is completed and handed pver to the client so we can give the deleted portion to another contractor.