My comments are given in red below:----- Original Message ----From: Amith

To: sam99@eim.ae
Date: Tue, 26 Oct 2010 08:20:45 +0400
Subject: PENALTY FOR DELAY

Dear Sir,
Need suggestion , we completed the jobs in 2009 last year, the client is notifying after a year
there is penalty.
I think this should have been raised last year within 28 days of occupancy. Is their claim null &
void.
If the Contract is similar to FIDIC-Fourth Edition, then notice is not required. If it is similar to FIDIC 1999 the notice is
required (as discussed during the Advanced Course), but we have no way of knowing as yet, whether or not a local
court would consider this notice to be condition precedent. It is safer for you to prepare your claim for the period of
delay and justify your entitlement to an extension of time, in order to avoid penalties.

Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors

PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Regards
Amith
----- Original Message ----From: Saif Bin Darwish Contracts
To: sam99@eim.ae
Date: Wed, 15 Sep 2010 14:17:56 +0400
Subject: Q&A

Dear Prof. Sam

Thank you so much for the valuable guidance through the forum of short Q&A mails. It is really
worth for those who are engaged in the construction industry and shall be followed by them for
resolution of issues encountered. May I put 4 Questions for your kind clarifications;
1.

Recovery of OHP (HO & SO)

The Contract period for is 10 months (1987 FIDIC). Owing to (Additional works) Variations
were issued by the Engineer. Contract period was extended to 15 months (extra 5 months). The
Contractor gets paid through the mechanism of Contract BOQ rates, including prelims for 15
months. New pay items for the Variation are agreed and added in the BOQ for execution.
Obviously the Contract unit rates include provision for site OH as well as HO OHP. Is it right to
adjudge in this case that the Contractor is not entitled for any additional OHP as it recovers either
OHP through the operation of the Contract BOQ rates? As discussed during the 5th Session,
Client can deduct any OH included in the value of variations (but beyond 15%) from the OH
included in the prolongation cost claim, only if the value of variations exceeds 15% of Effective
Contract Price.
2.

10% retention on the Contract Price

I refer to Q from Mr. Rohindra Desilva registered on 08 April 2009. which is clarified in your Q
& A paper dated 27 March 2010. Your answer shows According to FIDIC 4th Edition, of course
the limit is 10% of the Contract Price and not of the value of the work done. May I seek your
kind advice that the retention normally is made on the value of the work done only and not on
the Contract Price. Assuming a case of actual value of Contract is less than Contract Price how
the retention can be elevated to 10% of the Contract Price which is never expended. Please be
kind enough to review and advise.
If the value of work done is more than the Contract Price, then the limit of Retention Money is
10% of the Contract Price. If the value of work done is less than the Contract Price, then the limit
does not come in to play.
3.

Approval of shop drawing by the Engineer

On any re-measured construction Contract in line with FIDIC 4 th Edition, the design shall be
provided through IFC drawings to the Contractor, who is bound to execute that. During this
process the Contractor prepares the shop drawing in accordance with the site conditions and on
the concept of the designs issued. The shop drawing will be approved for the execution of the
element by the Engineer.
(a) Does the Engineer hold a responsibility for the accuracy and details of the shop drawing
being implemented, despite the remark always by the Engineer that the approval does
note release the Contractor any of his obligation under the Contract? No.
(b) Or the full responsibility thereof again vests with the Contractor regardless the
approval? Yes for shop drawings but not for design.
(c) If so, why it is necessary that the Engineer shall approve it? To prevent Contractors from
executing work solely based on design drawings without taking in to consideration site
conditions (thus not preparing shop drawings) etc.

(d) What is the logic behind this statement from the Engineer in approval process as it is
clear from the Contract otherwise? In some jurisdictions the law says that the approver is
responsible. To avoid such responsibility Engineers use this.
4.

Omitted work procedure to re-tender

As we know the omitted works can not be granted to another Contractor by the Employer as per
51.1 of FIDIC 4th Edition. If so, the Contractor need be compensated. What would be probable
compensation, it shall request:
(a) its OH&P supposed to be lost? Yes
(b) Any other compensations? As discussed during the Advanced Course in detail, if the
Contractor can demonstrate that he could have gained even more than the OH&P stated
in the Contract, that too can be claimed.
(c) How would the Contractor request the Employer for the compensation, probably with a
claim? As discussed during the Advanced Course in detail, through a damages for breach
of contract claim.
(d) Can another Contractor be engaged for the omitted work after the issue of DLC (to do
away with the compensation issues)? As discussed during the Advanced Course in detail,
if it could be proven that the Employer did it in bad faith, compensation could still be
claimed.
Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors

PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Regards
Joseph Ubald C. Eng.
From: Asif Memon [mailto:memon.asif@gmail.com]
Sent: Tuesday, September 28, 2010 9:26 AM
To: Prof. Sam
Subject: Re: Administrating FIDIC Contracts ? - Be a Sound Contract Administrator

Sir,
Good Morning,
Would like to know if you have authored any book on Contract Administration.
If so how can we get it.
Authored but not published yet. Shall let you know when available. In the meantime
if you wish to read about Head Office Overheads and Samaratunga Formula in great
detail than found in the SCA handout, you can reserve a copy of a QS journal (Dhs.
10/-) with an article from me being published in December 2010 (limited number of
copies) by sending an email to dhamshan@gmail.com

Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors

PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

regards,
Asif Memon
From: Saif Bin Darwish Contracts [mailto:sbdcontracts@dbasons.com]
Sent: Tuesday, September 21, 2010 2:59 PM
To: sam99@eim.ae
Subject: [!! SPAM] RE: Q&A
Dear Prof Sam
We still receive the Q&A to enlighten the knowledge and improve our skills in the subject. Thank you so
much for your unconditional goodwill to educate all you can. Let me put an instance for your kind
clarifications.
We have encountered with a construction contract where the IFC drawings included works related to the
storm water drainage and sewer works. These drawings indicated only general line diagram with
minimum dimensions / without gradients and necessary data to carry out the work. When requested for
the design drawing, the Engineer / Project Manager clarified that as the works are remeasured, the
Contractor is to survey the site and make shop drawings to be submitted to the Engineer for approval.
With almost new designs, we have completed the work as it was a fast-track project.
In fact, design drawings necessary to execute the work are to be issued by the Engineer / PM. Is it not
their liability to provide them in such a re-measured contract? If yes, can the Contractor claim for the extra
work it has performed to generate the (design) drawings called by the Engineer shop drawing?
Shop drawings to be prepared according to site levels etc is the Contractors responsibility, but not
calculating the necessary pipe diameters etc., which are design responsibilities. If the Contractor informed
this fact to the Engineer and notified that he would be claiming for the design aspects (by conveying an

approximate cost of the design) thus giving an option to the Engineer/Employer either for them to design
or to pay the Contractor for the design, then a claim can now be made.

Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors

PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Regards
Joseph Ubald

From: Edward J.F.Peter [mailto:edward@nicuae.ae]

Sent: Sunday, October 31, 2010 3:03 PM
To: sam99@eim.ae
Subject: SCA Course
Dear Sir,
I had attended the SCA course which concluded on 29th October 2010, it was very
informative and has to a large extend awaken my professional knowledge to the next level. I
am looking forward to your next Advance Course. Thank you for deciding to pursue our
common target of steering the Contract Administration in this part of the world
towards at least a Sound if not Perfect degree. Advanced Course would be on
February 25th and March 4th 2011 and you can register now.

Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

From: Prabhash Miriyagalla [mailto:prabhash@engineer.com]

Sent: Monday, November 15, 2010 1:47 PM
To: sam99@eim.ae
Subject: SCA Alumni
Dear Sir,
As an alumni of SCA, I am to forward following scenario for your comments.

In a Lump Sum Contract, there were two options to be priced for single particular work in BoQ, but it was
clearly mentioned in the specifications that only one option to be executed in Post Contract stage.
By mistake the Tenderer have included both costs (adding up option 1 & 2) in his Lump Sum price and
accepted by the Employer. When the Construction started the Employer/Engineer selected the option 2.
1.

Can the Engineer deduct cost of option 1 from Lump Sum price? If the documents clearly stated that
only one of these two options would be selected and instructed, then the addition error in the Lump Sum
Contract Price should be corrected by deducting the price for option 1.

2.

If the work omitted from the Scope of work which option to be considered for cost saving? Prices for
Options 1 & 2.

Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Best Regards
Prabhash Miriyagalla
From: Penido, Lilian [mailto:Lilian.Penido@aecom.com]
Sent: Thursday, November 11, 2010 11:32 AM
To: sam99@eim.ae
Subject: Query

Dear Professor Sam,

Good morning to you.
Im planning to take the advance course on March 2011, hopefully. Advanced
Course would be on February 25th and March 4th 2011 and you can register now.
By taking up the SCA course last August this year really helped me a lot. Thanks for
your effort.
Professor, I need your comments regarding one issue that Im currently resolving.
Im not so sure whether my assessment is contractually sound or not. This is the
situation. The contract is lump sum and for design and build. The structural
elements such as truss, beams and framing works were shown in the structural
tender drawing. However, the contractor excluded the items for the above
structural elements which are identified in the BOQ. In one of the post tender
clarifications, the contractor raised a query and the response of the clients /
consultants states All items in the drawings are deemed to be included in your

price unless expressly stated otherwise. Does the statement unless expressly
stated otherwise also applicable or valid for the contractor which he had identified
the items in the BOQ to be excluded. The fact is that the contractor did not
specifically raise or clarify in any of the post tender clarifications that he excluded
and why he excluded the structural elements from his offer. My assessment is that
the contractors claim for a variation is invalid. It would be difficult for you to
support your assessment due to the following :1. Typically, the Tender has priority over other contract Documents (especially in
FIDIC 4th) and since the priced BOQ is part of the Tender which refers to the
exclusion, Contract Price has to be construed as excluding the cost of these
structural members.
2. Because
the
Contractor
was
not
requested
qualification/exclusion prior to entering into the contract.

to

withdraw

his

3. As discussed during the 7th Session, an Offerer (tenderer) can attach any
conditions/qualifications/exclusions that he prefers, to his offer, whereas the
acceptance (by the Employer) should be unconditional and absolute.
Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

I would appreciate if you could comment on the above matter.

Best regards,
Lilian V. Penido
Lilian Penido
Quantity Surveyor
From: Muhammad Rafi Attari [mailto:muhammadrafi10@gmail.com]
Sent: Monday, November 01, 2010 9:44 AM
To: sam99@eim.ae
Subject: Question related to earth work

Dear Prof. Sam.

I just completed Sound Contract Administrator certificate course & I read both mails
attachment but I did not found my question answer. Now I hereby request you
for help, kindly advise me regarding the below questions.

We awarded on Contract to a contractor in October 2008, detail is as under

We invited tenderer to quot the for the Project in June 2008 and issued tender
documents. In tender documents we not issued complete project survey report and
we issued only 50% of project survey report and balance 50% area we did not made
any survey but in clarification we given some approximately quantities and
mentioned the note that to check the actual quantities is in contractor's scope of
work, even we did not issued proposed gate levels.

During tender contractor did not raise any query regarding the levels and
earth work (cutting filling quantities).
During the time of final negotiations Client advised, issue blank BOQ to
contractor that he will quantities (because he mentioned that the
quantities are not matched as actual), they submitted BOQ with their
quantities.

Contract awarding lump sum amount and letter commencement of work is

also issued but in this stage due world market recession / crises Department/
Client did not paid advance payment as per contract. After six (6)
months Client ask for discount and Contractor offer discount and both parties
agreed.

During execution of work Contractor did not submit any notice for claim but in
one MOM they mentions that there is variation.

After approximately 9 ~10 months they submitted earth work claim approxi.
9 million.

My opinion they do not have any right to claim any amount, because
1. As per our specification we have clause that the contractor has visit the site
and to quote accordingly.
2. Contract is Lump sum Contract.
3. During tender stage they did not raise any query regarding NSL of missing
area.
4. Mostly BOQ items quantities they changed and item excavate (cut & fill ) to
achieve the grade level they mentioned included without any quantities.
5. Contractor did not submitted any notice.
6. After six month when they offer discount why they did not inform their
intention to claim.
7. They do not have any Engineer signature NSL & grade level.

Kindly comment I am right or wrong. Your favorable feedback is requested.

From the information you provide (and if the Engineer did not instruct during the post contract
stage to change any levels that were already given in the tender documents), the contractor does
not appear to have a valid claim.
Regards,

Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Best regards
Muhammad Rafi (Sr. QS)