Dear Daya,

I agree with comment by soumendu that you are not entitled for 15% oH & p as it is not variation to your scope of work. Usually what we follow is that any variation to nominated S/c works, the Nominated s/c will get his OH & profit seprately using the % as quoted in appendix to tender for variations to s/c works. Over this we as a main contractor will get OH & P percentage as quoted percentage in BOQ for PS items.

For example: The contract value is 1000. Cost of variation amount is 50. over this S/c OH & p = 15%. So total cost of provisional sum = 1057.5.
The maincontractor will get OH & P of 5 % only on this value (approx 1110)since its variation to him and its only a co-ordination charges oH & p percentage for you This is because you are getting paid for change in value of PS and not for executing the job yourself.

Deepak.

Hi Daya

In my opinion, as per Cl.59.4(c), the Main Contractor is entitled for a sum being a % rate of actual price of the P.S items in respect of all other charges and profit. In your case I presume that you have signed a Contract wherein the Appendix states that ’% for adjustment for P.Sums’ is 5%.

If you refer to Cl.58.2(Use of Prov.Sums), it clearly states that if the P.Sum is instructed directly to the Main Contractor, then, it will be traeted as a ’variation’ to the Contract and shall be dealt in accordance with Cl.52. However, if the P.Sum is instructed to a Nominated Sub-Contractor, the sum to be paid to the Main Contractor shall be in accordance with Cl.59.4(c)-described above.

I think you are not entitled to any upliftment in the profit % on P.Sum Items on this basis.

I would appreciate comments from other members.

Soumendu

Dear Planners,

In view of the discussion i would like to share some of the most important things as a planner should note.

1. Planner has to keep a provision in his master schedule for the execution of the PS items as they also form part of the contract. This will be based on his assumption / previous exp. After the nomination of ps the s/c has to agree to the duration of wrk execution. Else you can raise your concerns of schedule befre entering into a s/c aggrement with him. If not then as per FIDIC he will be deemed to be a s/c to main contractor and all risk of timely completn of project will be transfered to main contractor. Hence s/c should agree to the programme & this is very imp to cover yourself frm claims.
2. Provisional sum items can be of two types. a. client provided ps and contractor provided ps. As a main contractor i may be specialist in civil wrks only & may not be doing a specialised MEP, aluminium works, so to arrive at a contract value i can keep some amt as prov sum for which client will nominate a s/c. So basically the drawings etc being not ready during tender stage & hence prov sum is kept is not true in all cases.

guys keep writing and continue some good discussions.

Deepak.

Dear Daya,

As far as my view goes on the subject, Check the tender drawings issued to nominated s/c wheather these changed items were included in their tender drawings / quotations/ boq even though not present in your drawings. If they are then it means he has agreed to work for that same amount for that scope and you are eligible for only 5 % oh&p. If not then the client nomination letter for certain cost of work of nominated s/c is according to your tender drawings & scope mentioned in your drawings and boq. then you can claim it as a variation to the contract and you are eligible for 15% oh & p as varation of work cl 52.1. Usually since your invovlment is only extra co-ordination work for this variation it does not considerably increase your oh the client would initially deny it but since it is your right you can agree some lumpsum amt.

Deepak.
Project Control Engg.
Dubai,
UAE

Hi Daya,

I guess, the 5% is not the same OH&P as uplift distributed to your direct costs. Normally in building services the OH&P ranges from 8-15% (average, incldg MEP)

Maybe the 5% is your administration cost on the Subcontractor as assigned by the Client. If you have additional quantities and those were not shown in the BOQ, you deserve to get your % uplift OH&P.

Cheers,
R. Catalan

Hi planners,

Do planners take into account in the programme for provisional sum in tender stage?

What happened if the provisional sum is spent when into contract, how do the planner/progress monitor knows whether the actual time taken to do the "provisional sum" work meet the planned duration(if planned in the 1st place)?

Do provisional sum affect planning? how do planner explain the effect of the work to the programme in the case of expeding proviional sum? say 50%, 150% or even 300%
Do planners involve in claim & assessment or is it a bean counters duties?

In my opinion the name "Provisional" itself states that the client doesnt sure about the quantum/cost of works and that s da the reason t was kept as provsional (ie Approximate sum)....moreover no drawings would have been finalised during that time..if t was finalised why t was not included in the contract..so client has the right to change/finalise the drawings for those provisional items..

Ok...now, the question will goes to acccepting/sticking the %age quoted by contractor for those provision sum itmes,upto wat extent (???) is a valid point from you...it shud not be like a change in the proviusional sum from 100$ to straightaway 1000$....if the change is huge, then the contractor may play with client for a %age hike in the co-ordination charges (prov sum) towards the diff in prov sum from the tender provisional sum to the revised amount..

I think u may use the points mentioned in FIDIC under the clause 12.3 to support your claim...

let us welcome experts comments...

Venkat