7/35 =20% of the Contract amount. When you have this kind of change you need to study it well and start presenting your claims to the Owner.
Make sure that you continue sending them relevant issues on a weekly basis because most forms of Contract have a time limit for asking for claims. This should be supported on a regular basis with facts.
I think that your management should decide on keeping all their scope of work. Its a top management issue, and you need to present all the supporting data.
Usually there are more than one reasons for taking such a decision. You need to find them out, maybe we can provide you with more solutions.
In most legal systems the Employer cannot take away work that has been awarded to you and give it to another contractor - especially if it is your own sub-contractor.
If you agree to the ommission you should retain your anticipated profit.
Also you will have no responsibility for management and programming of that section of the works - I am assuming that you will have other works to do that will interface with the omitted civils works.
The omiited work should be retained in your programme as originally planned but use a different colour code.
Take out any float in the omitted work and add it to your own work - use time risk contingency bars for this purpose.
Your scope for EOT claims and loss and expense will be greatly increased - keep accurate records and make regular delay reports when the omitted works are delayed.
I will let you know further details on the contract but Variation clause is asking for a 15% variation before I can ask for another rate for the items.
Regards
Member for
17 years 3 months
Member for17 years3 months
Submitted by Samer Zawaydeh on Sat, 2008-09-27 15:27
The Engineer will issue a V/O based on the approval of the client. Since you have more than one Contractor doing similar jobs at site, it seems to me that the Client is trying to save money by shifting the scope from Contractor to another.
You will need to know your Contract inside out. Basically, check for clauses for variation in quantities. You might be allowed to change the Unit Rates for the items that have changed more than 20% AND more than 1% of the Contract amount. In that case you can ask for the higher Unit Rates for these items and include the difference in OH&P and Mobilization.
If you are not working with a professional Owner, then you need seriously to consider a dispute resolution method as per Contract clauses. Going to courts will take years and you will end up paying the lawyers your remaining profits and maybe more depending on the margin that you have.
The size of the project in terms of cost is $35 million. The cost of the said VO is in the range of $6-$7 million. Interestingly the VO is being awarded to one of our subcontractor who is currently engaged on the same section of Works by us.
Even if we agree with the VO, there is still a potentail loss to our OH & mobilization. But, on the other side there will not be any gain on the completion of the project as the forecast finish would remain same for the civil works and rest of the trade works will be followed later on.
Any other thoughts/suggestions?
Member for
17 years 3 months
Member for17 years3 months
Submitted by Samer Zawaydeh on Sat, 2008-09-27 10:30
It depends on the balance activities that you have. If the sequence of activities did not change, then the duration of work will only change or you can reduce the production rates by reducing the manpower and material and finish the project during the same duration.
If you intend to use the same production rate, by maintain the same manpower since you already have the overheads of your project calculated based on the manpower required for the project, you will show that you will end your project at an earlier time.
Another solution is to have a schedule for the remaining activities and call it "To finish" schedule. Figure out what you need to complete the work and come to an agreeable solution with the Owner.
Member for
18 years 5 monthsRE: VO & Working Programme
Dear All
Thanks for your replies. I am on eid holidays in my home town for a week. Catch you later. Till then Happy Eid to all of you.
Cheers
Member for
20 years 10 monthsRE: VO & Working Programme
Mike has got it pretty spot on
Member for
17 years 3 monthsRE: VO & Working Programme
Dear Sajid,
7/35 =20% of the Contract amount. When you have this kind of change you need to study it well and start presenting your claims to the Owner.
Make sure that you continue sending them relevant issues on a weekly basis because most forms of Contract have a time limit for asking for claims. This should be supported on a regular basis with facts.
I think that your management should decide on keeping all their scope of work. Its a top management issue, and you need to present all the supporting data.
Usually there are more than one reasons for taking such a decision. You need to find them out, maybe we can provide you with more solutions.
Good luck,
Samer
Member for
19 years 10 monthsRE: VO & Working Programme
Hi Samer
In most legal systems the Employer cannot take away work that has been awarded to you and give it to another contractor - especially if it is your own sub-contractor.
If you agree to the ommission you should retain your anticipated profit.
Also you will have no responsibility for management and programming of that section of the works - I am assuming that you will have other works to do that will interface with the omitted civils works.
The omiited work should be retained in your programme as originally planned but use a different colour code.
Take out any float in the omitted work and add it to your own work - use time risk contingency bars for this purpose.
Your scope for EOT claims and loss and expense will be greatly increased - keep accurate records and make regular delay reports when the omitted works are delayed.
Good luck & best regards
Mike Testro
Member for
18 years 5 monthsRE: VO & Working Programme
Samer, thanks for your reply.
I will let you know further details on the contract but Variation clause is asking for a 15% variation before I can ask for another rate for the items.
Regards
Member for
17 years 3 monthsRE: VO & Working Programme
Dear Sajid,
The Engineer will issue a V/O based on the approval of the client. Since you have more than one Contractor doing similar jobs at site, it seems to me that the Client is trying to save money by shifting the scope from Contractor to another.
You will need to know your Contract inside out. Basically, check for clauses for variation in quantities. You might be allowed to change the Unit Rates for the items that have changed more than 20% AND more than 1% of the Contract amount. In that case you can ask for the higher Unit Rates for these items and include the difference in OH&P and Mobilization.
If you are not working with a professional Owner, then you need seriously to consider a dispute resolution method as per Contract clauses. Going to courts will take years and you will end up paying the lawyers your remaining profits and maybe more depending on the margin that you have.
Best,
Samer
Member for
18 years 5 monthsRE: VO & Working Programme
The size of the project in terms of cost is $35 million. The cost of the said VO is in the range of $6-$7 million. Interestingly the VO is being awarded to one of our subcontractor who is currently engaged on the same section of Works by us.
Even if we agree with the VO, there is still a potentail loss to our OH & mobilization. But, on the other side there will not be any gain on the completion of the project as the forecast finish would remain same for the civil works and rest of the trade works will be followed later on.
Any other thoughts/suggestions?
Member for
17 years 3 monthsRE: VO & Working Programme
Dear Sajid,
What is the size of your project?
Can you afford to close he project early without considerable loss of your overhead and mobilization cost?
Best,
Samer
Member for
19 years 10 monthsRE: VO & Working Programme
Hi Sajid
Check your contract before doing anything to reduce your programme.
In most forms the Engineer cannot reduce the contract period when work is omitted - unless it is part of an overall EOT assesment.
Also check if the work is really omitted - ie not done at all - and is not being given to other contractors.
In most systems this can only be done by mutual agreement.
Best regards
Mike Testro
Member for
17 years 3 monthsRE: VO & Working Programme
Hi,
It depends on the balance activities that you have. If the sequence of activities did not change, then the duration of work will only change or you can reduce the production rates by reducing the manpower and material and finish the project during the same duration.
If you intend to use the same production rate, by maintain the same manpower since you already have the overheads of your project calculated based on the manpower required for the project, you will show that you will end your project at an earlier time.
Another solution is to have a schedule for the remaining activities and call it "To finish" schedule. Figure out what you need to complete the work and come to an agreeable solution with the Owner.
Best,
Samer