LSTK Contract
In the Open Standard
Raphael Adeyemi, CCP, MNIQS, RQS, MQSiMember for 19 years 4 months
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Dear All,
I have a Colleague that he has a project under LSTK (Lump Sum Turn Key) contract that include a BOQ. The project is 90% completed now and the Supervising Consultant is about to pay the Contractor based on re-measurement which will bring the contract sum down by 91%.
There is no provision for remeasurement in the contract as it based on lump sum and the Contractor is responsible for the final design while the approval lies with the consultants.
I am of the opinion that the BOQ is meant to arrive at the Lump sum contract at the time of tender and also to admnister any contract change orders in post contract administration.
The funny thing is that the consultant based his monthly valuations on the actual quantities executed within the period.
My friend new additional advise as I have advised him to reject the Consultant Anticipated Final Account based on measurement.
I waant your comments you guys
Ciao
Rafel
I have a Colleague that he has a project under LSTK (Lump Sum Turn Key) contract that include a BOQ. The project is 90% completed now and the Supervising Consultant is about to pay the Contractor based on re-measurement which will bring the contract sum down by 91%.
There is no provision for remeasurement in the contract as it based on lump sum and the Contractor is responsible for the final design while the approval lies with the consultants.
I am of the opinion that the BOQ is meant to arrive at the Lump sum contract at the time of tender and also to admnister any contract change orders in post contract administration.
The funny thing is that the consultant based his monthly valuations on the actual quantities executed within the period.
My friend new additional advise as I have advised him to reject the Consultant Anticipated Final Account based on measurement.
I waant your comments you guys
Ciao
Rafel
6 replies
Oldest first- 0Gary Whitehead ·Can I just check my understanding here: Lump Sum contract was let, 90% of the job is complete but based on re-measurement, less than 10% of the original BOQ has been used? How can this be possible?
If this is the case, I completely understand why the consultant would be keen to avoid overpaying by a factor of ten.
Nevertheless, it seems clear that if there is no provision for re-measurement in the contract, then re-measurement cannot be used to determine payment.
- 0Samer Zawaydeh ·Dear Raphael,
We need to repeat the two golden rules;
1. Read your conditions of Contract.
2. Documentation of any extra works.
What Gary and Mike said is correct. The Lump sum amount should be paid in full.
I would like to bring to your kind attention that it seems to me that your consultant is doing something wrong in reducing your invoiced amount by changing your contract amount. This is not up to them. They can’t change the Contract amount.
I woul recommend that you start applying your conditions of contract and seek professional expert opinion in your industry to serve on dispute resolution if it arise in the future.
With kind regards,
Samer - 0Karim Mounir ·we have a similar "funny" cl. in a LS Contract that says:
Employer shall reserve the rights to add/omit any items and/or cancel any parts of Works from the Contract and the sum incurred thereby shall be adjusted from the total price accordingly.
Don’t understand how to revise a LS total price Contract after award, and the most funniest thing is that the Employer utilized this cl. and deleted nearly 15-20% from the scope till now!
Karim - 0Mimoune Djouallah ·hi all
"The funny thing is that the consultant based his monthly valuations on the actual quantities executed within the period"
actually i find this approach very practical, and where i work it is a common practice. even in the case of a lump sum contract, sure when you finish the work you will get the 100 % of the original amount.
what’s about payment based on intermediate milestone ? you have to complete a whole area to be payed. that’s what i call funny ;)
best regards
Mimoune
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