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

To: "Prof. Sam" <sam99@eim.ae>

Date: Wed, 02 Nov 2011 10:07:19 +0400
Subject: Question on remeasurable contract

Good morning Prof. Sam,

I have a question on a remeasurable contract if you dont mind :)
We have trial pits priced per number stating the different depth in stages of 1m.
The pits are larger now and I proposed for the remeasured volume, priced of which was taken from
the derived cost per volume of the BOQ item which was then converted to per number.
I showed the calculation of the new volume priced per number.
Is my approach correct? Client is not accepting this.

1. According to CESMM3, the BOQ item measured in number (nr) for trial pits (i.e. code B
11* or B 12*), does not involve any excavation activity and therefore it has no cost
significance related to the size of the pit. The rate constitutes the cost of setting-out/marking
the pit location, and shifting and setting up the excavating equipment/gang to the location,
which cost does not vary if the pit becomes larger.
2. The excavation itself should have been measured in the BOQ as a depth in metre (m)
item, also stating the plan area (as code B 13* and Rule A1). If the pit becomes larger (than
the stated plan area), then it is the rate of this item that would vary, and your method can be
used to calculate the new rate.
3. If however your BOQ is not measured strictly in accordance with the Rules of CESMM3,
then you need to first establish what the plan area of the pit that was fairly and reasonably
considered for the tender purpose and demonstrate that it is smaller than the required new
size before you apply your method. Remember to give a discount for the fixed costs of item 1
(if it is not measured as a separate item), as they do not increase when the pit becomes larger.
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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

Thank you very much for your time.

Aileen Bugayong

----- Original Message ----From: Abdul Kadir Arif

To: "sam99@eim.ae" <sam99@eim.ae>
Date: Mon, 31 Oct 2011 23:22:22 -0700 (PDT)
Subject: Delay penalty

Respected Sir,
Hope this email finds you with good health. I'm one of the Alumni of SCA classes. I'm working for a
Contractor. Kindly advice me to calculate the penalty clause under a Procure and Construct (PC)
Contract which is as follows:
In the event the Contractor delays the performance, completion and delivery of the complete Work
within the time specified in the Contract, a delay penalty shall be imposed and assessed on the basis
of the project's daily average cost by dividing the Contract value by the performance period according
to the following:
a)

The penalty against the first period of delay shall be equivalent to 1/4 of the daily average cost for
each day of delay until it reaches either 15 days or 10% of the Contract Period whichever is longer.
b) The penalty against the second period of delay shall be equivalent to 1/2 of the daily average cost for
each day of delay until the delay for the two periods reaches either 30 days or 15% of the Contract
Period whichever is longer.
c) The penalty against the third period of delay shall be equivalent to full daily average cost for each day
of delay following the longer period mentioned in (b) above.
If a delay in performance prevents use of the Work then the total amount of the penalty shall not
exceed 10% of the total Contract Price.
d) If, in the judgment of the Employer, the delayed portion of the Work will neither prevent the full
utilization of the Work at the specified completion date, disrupt the use of other facilities, nor adversely
affect the use of that part of Work completed, then the penalty shall be applicable to value of delayed
Works in accordance with the method applied in computing the penalty applicable to original Work,
provided that total amount of penalty shall not exceed 10% of the value of delayed Work.
Project data:
Contract Price: Dhs 250,000,000/Final accounting will be on the basis of the actual quantities of the Work executed
Time for Completion: 130 weeks from Commencement date
Completion including testing and commissioning and ready for TOC: week 126*
Complete demobilization: week 130
* Delay penalty as specified above shall apply to Contract Milestone
Since there are no definitions given for the Contract value, performance period and
Contract Period there are likely to be disputes. For the purpose of the following
comments it is assumed that the Employer and Contractor would agree the Contract
value to be the Contract Price (excluding variations/claims) and performance
period/Contract Period to be the completion period (excluding delays and Defects
Liability Period)
Completion period

126 x 7

882 days

Daily Average Cost

250,000,000 / 882

283,446.71

In both Type (a) penalties and Type (b) penalties stated above since 10% or 15% of 882
days amounts to periods longer than the stated 15 days or 30 days, the longer period is
taken into consideration
Type (a) penalty = 883rd day to 970th day

= 88 x 283,446.71 / 4 = 6,235,827.62

Type (b) penalty = 971st day to 1015th day = 44 x 283,446.71 / 2 = 6,235,827.62

Type (c) Penalty = 1016th day to 1059th day = 44 x 283,446.71

= 12,471,655.24
24,943,310.48

On the 1060th day penalties would reach the limit of Dhs. 25 Million.

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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

I expect you kind comments please. Thank you Sir.

Best Regards,

Abdul Kadir Arif

From: NISHANTHA HWU [mailto:hewawelege@gmail.com]
Sent: Wednesday, October 26, 2011 1:18 PM
To: sam99@eim.ae
Subject: Question
Dear Professor Sam,
Thank you very much for you valuable question and answer session .
I got an issue with PC for Statement at Completion in form of Contract FIDIC 4 th edition for a roads
and infrastructure project. In this specific project the Taking-Over Certificate (backdated) had been
issued on 25 May 2008. The date stated in the TOC is original date of Completion which was 8
November 2007 for whole of the Works. TOC had been issued only for part of the Works completed
up to the date Stated in the TOC. It mentioned that outstanding works as all MEP works associated
with the irrigation and fire fighting network that shall be completed as soon as practicable. But MEP
Works also had been completed 80% at the date of TOC issued (25 May 2008). The Contractor has
not submitted the Statement at Completion in accordance with the Contract but Interim Payment
Certificates have been issued and consultant certified payments including 80% of MEP works also
which testing and commissioning yet to be done. First half of the retention also had been released
excluding for MEP works. The Defect Liability Certificate has not been issued yet. Statement at
Completion has been submitted recently as requested by the Engineer and I was appointed as QS. I
did the draft PC in accordance with Sub-clause 60.5 and 60.2 based on TOC excluding MEP work
which had not been done at the date stated in the TOC. PC represents few Millions of money to be
recovered from the Contractor. Now counter argument has been raised by the Contractor the work
done shall be taken as work done at the date of TOC issued (25 May 2008). Could you please
advisee me what would be consequences if we certify the work done including MEP woks also?. I
have already included MEP works under Sub-clause 60.5c in the Statement at Completion.

The correct way to administrate the contract is to wait until the TOC for the whole of the
Works is issued before dealing with the Statement at Completion. Payments can however
continue based on further interim payment certificates.

Now that the Engineer has incorrectly asked the Contractor to submit the Statement at
Completion, the following options could be considered:1. Issue immediately a TOC for the whole of the Works and then certify the Statement at
Completion, or
2. Inform the Contractor that an Interim Payment Certificate would be issued against the
submitted Statement at Completion, and the Contractor has to submit the Statement at
Completion again after the TOC for the whole of the Works is issued, or
3. Consider the issued TOC to be for the whole of the Works and the instruction to
complete the outstanding work as soon as possible to be read as as soon as
possible during the Defects Liability Period (which can be regularized by a letter)
and certify the Statement at Completion.
Whichever option is selected, the payment being certified should represent the value of work
completed to date and not to a date in the past. Also if 1 or 3 is selected, 50% of the Retention
Money too should be released.
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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

Thanks and best regards!

Nishantha Hewawelege
From: Yvette Tacuyan [mailto:yvetacuyan@yahoo.com]
Sent: Monday, October 24, 2011 9:58 AM
To: Prof. Sam
Subject: Appendix to tender

Hi prof Sam,
I hope that all is well,
I have a question, I am preparing a Contract Agreement. After the agreement page, I
attached the "Appendix to Tender". Our Client commented to replace it with the
"Appendix to the Agreement".
Mostly, the contracts that I encountered, it is Appendix to Tender since the basis of
the Contract is the Tender, and there were some I've seen that consultants use as
"Appendix to Contract" or "Appendix to the Agreement"
Can you please enlighten me which one is the correct as per FIDIC?

Correct expression is Appendix to Tender. If you change this expression to any

other, then through Part II- Conditions of Particular Application, you should also add
a note stating that the definition given in Sub-Clause 1 (b) (viii) is changed to your
new expression.
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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

Thanks Prof.

yvette
Following Questions have been raised during recent classes:1. How can we claim cost reimbursement and EOT due to late shop
drawings approval by the Engineer if we did not show shop drawing
activity in clause 14 programme?
Introduce new activities with realistic durations, (compatible with other provisions in
the Contract) link them logically to amend the Clause 14 programme to include shop
drawing submission/approval, and use this amended programme as the base-line to
demonstrate the impact of late approvals. Remember to state in the claim that fair
and reasonable modifications have been made to the clause 14 programme, without
which it is not possible to demonstrate the impact.

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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

2. POM(I) requires net measurements to be used for all items, but when
measuring dry wall cladding above ceiling level (BOQ description refers to
full height), can the Engineer insist in measuring the height only up to
ceiling sofit and not beyond?
No. Net does not mean visible only. But, the Contractor is required to prove that
it is not physically possible to stop the dry wall cladding at the ceiling sofit, and that
it should extend above ceiling level (or that the design drawings require or Engineer
has instructed to extend it above ceiling level), for structural stability or other
reason, in order to get payment for full height.

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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

3. Where the pricing in the Contract is imbalanced, how can the Contractor
support his Claim?
The claim has to be based on actual additional costs incurred at site (and off site)
supported by contemporary records, which should show the actual (but fair &
reasonable) resources used when compared to the fair and reasonable resources that
could have been used, had the delay/disruption not occurred. Therefore it has no
connection with any imbalance in the pricing found in a BOQ.

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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

4. In Lump sum Contracts, if the Employer/Consultant gave misleading

information during the Tender stage resulting in a big loss to the
Contractor when executing the work, how can the Contractor recover his
loss?
The Tenderer (now Contractor) was required to verify the accuracy of the information
given by the Employer/Consultant and priced the Tender taking into consideration all
risks and accurate scope, and therefore would not be able to raise any claims, unless
it can be demonstrated that the Employer/Consultant intentionally misled the
Contractor.

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
Visit www.drsam.zzl.org for details of DRSAM FZE courses

Dear Alumni,

Media reports regarding the creation of 85 Million new jobs in the region by 2020, discussed
at the World Economic Forum, would make it necessary for you to decide where you want to
be at the beginning of the New Year 2012. With an influx of thousands of Contract
Administrators into the industry, you need to progress to more senior positions to make room
for the newcomers. Additionally you need to be competent in training the newcomers.
Both these needs would no doubt be a threat to those who are stagnant at their current
positions due to lack of advanced knowledge required for progression, whilst these could also
be the opportunity to move forward by deciding to gain the advanced knowledge required to
practice your discipline at senior / managerial / advisory positions as an Engineer, Quantity
Surveyor, Project Manager, Planner, Architect or other professional who is also required to
administrate contracts in addition to practising his or her own discipline.
Visit www.drsam.zzl.org