I recently received a request for advice from one of our course attendees. I have been asked for advice about this topic on several occasions so I thought it worthy of a blog. The situation and query was as follows:

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 be the stance of the Contractor 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?

My reply was as follows:

This a fairly typical scenario that I have come across on several occasions and arises from the Employer/Engineer wanting both to have his cake and to eat it too.

You will of course need to check the details of the actual contract, but the following is based upon a typical contract of this type based on FIDIC, where the Contract is based on a lump sum price:

The BoQ is usually stated in the contract to be an estimate, not to be relied upon and only to be used for evaluating monthly progress and variations.

The BoQ 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 by looking 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.

We have two case studies on this topic and would be happy to share them with you. Email us today for more.