At one of our recent courses someone asked me for some advice. I get asked about this particular issue quite a lot so I thought it would be helpful to put pen to paper – or finger to keyboard – and share my thoughts. So here is the scenario:

  • The Contract is a lump sum and not subject to re-measurement.
  • The Bill of Quantities (BoQ) was prepared by the Contractor at tender stage.
  • During the project closure, some items listed in the BoQ were not provided since these items were not included on the tender drawings, shop drawing or final as-built drawings.
  • The Client deducted these items as an omission at final account stage as the Contractor did not complete any of these billed works. The Contractor disagrees with this and asserts that he took the risk on the lump sum contract and the BoQ was merely for guidance and valuation only.

So…

What is the Contractor and Client’s entitlements under FIDIC for this kind of a situation?

What should the Contractor’s stance be on this matter?

Is the Client entitled to omit the value of the BoQ items not fulfilled by the Contractor despite it been a lump sum contract?

This a fairly typical scenario and often arises from the Employer/Engineer wanting to have his cake and to eat it too.

My advice is based upon a typical lump-sum contract under FIDIC:

  • The Bill of Quantities is usually stated in the contract as an estimate, not to be relied upon and only to be used to evaluate monthly progress and variations.
  • The Bill of Quantities is usually way down the order of precedence stated under Sub-Clause 1.5 (Priority of Documents) and below the specification and drawings.
  • This is a lump sum contract, so the lump sum is defined by what is shown on the drawings and included in the specification.
  • If therefore, something is not shown on the drawings/specification, but is listed in the BoQ, it is not part of the Contract or the lump sum price and cannot be deducted.

The best way to illustrate this is to look at the reverse scenario. If something is shown on the drawings, but not listed in the BoQ, would the Engineer/Employer pay for it as a variation? I doubt it very much.

Our friends at Claims Class have a couple of case studies on this topic and a similar article on their blog. Check it out if you’d like to read more on this topic. 

Hewitt Decipher Partnership’s expert consultants have been preparing and responding to claims for many years. Can we help you? Get in touch via our contact page; we would be happy to discuss any support that you may need.