Can any one explain the Value engineering Clause of FIDIC & NEC3 ?Which is more benificial to Contractors?
Thanks & Regards
Sankar Vijayan
Value Engineering
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Dear sir,
Both Fidic & Nec encourage Value Engineering by Contractor.By doing so if contractor Save money for client .how the benifit shared i heard that for NEC it is 50 -50 & Fidic it is 20 -80(20 for contractor) ,but i am not sure whether it is right or not.it is not clearly mentioned.Do u have any idea regarding this
regards
sankar vijayan
Hi Sankar
A value engineering excercise is usually where a contractor is requested to review the design and speciification and suggest ways and means whereby costs can be reduced.
It can be a problem however if not all the factors are considered.
I once worked on a large hospital where the contractor suggested a saving by reducing the basement area by 30%. The cost saving was considerable but the change added 5 months to the contract period - the contractor lost a lot of money.
As regards the difference in the contract forms I can't think of any off hand - you will need to read both sections to see if there is any fundamental shift in risk allocation.
Best regards
Mike Testro.