Taner Dedezade FIDIC accredited trainer counsel at Corbett
Taner Dedezade FIDIC accredited trainer counsel at Corbett & Co
Variations • • From a Public/MDB perspective The perspective of the Engineer in a FIDIC Contract
2014/24/EU Article 72 deals with how contracts may be modified without a new procurement procedure in certain specified circumstances. Clauses should be clear and precise. Rationale is that contracts should be awarded fairly, transparently and without discrimination and if a contract can be varied post award a public body could abuse this freedom to favour particular firms.
Engineer’s duties
Duties Engineer’s duties under the FIDIC Contract 1 Managing Time 2 Instructions and Variations 3 Measurement and evaluation 4 Design 5 Certifying Payment 6 Making 3. 5 determinations 7 Inspection and testing 8 Issuing TOC Project Management skills Programming Skills Legal skills Engineer Financial and accounting skills Legal skills Design Skills
Sub-Clause 1. 1. 6. 9/1. 1. 86 • “any change to the Works, which is instructed or approved as a Variation under Clause 13 [Variation and Adjustments]. ”
Engineer’s Instructions 3. 3/3. 5 1999 RED BOOK – 3. 3 2017 RED BOOK – 3. 5 e g n a h c Subject to the following provisions of this Sub-Clause, the Contractor shall comply with the instructions given by the Engineer or the Engineer’s Representative (if The Contractor shall appointed) or delegated assistant, on any matter related to the Contract. comply with the instructions given by the If an instruction states that it constitutes a Variation, Sub-Clause 13. 3. 1 Engineer or delegated [Variation by Instruction] shall apply. assistant, on any matter related to the Contract. If not so stated, and the Contractor considers that the instruction: a) constitutes a Variation (or involves work that is already part of an existing Variation); or If an instruction b) does not comply with applicable Laws or will reduce the safety of the Works or is constitutes a Variation, technically impossible Clause 13 [Variations the Contractor shall immediately, and before commencing any work related to the and Adjustments] shall instruction, give a Notice to the Engineer with reasons. If the Engineer does not respond within 7 days after receiving this Notice, by giving a Notice confirming, apply. e v i t n a t S s b u reversing or varying the instruction, the Engineer shall be deemed to have revoked the
1999 form • Work • Argue
• 2017 form • In the 2017 form, if the Engineer wishes to instruct a Variation then it is necessary for the Engineer to describe it as such and then Sub-Clause 13. 3. 1 will apply. If the Engineer does not describe an instruction as a Variation and the Contractor considers that it is a Variation the Contractor must immediately and before commencing work give a Notice stating its reasons for considering it to be a Variation and the Engineer must respond by giving a Notice either confirming reversing or varying the instruction. The Engineer does not need to make its own determination on whether the instruction constitutes a variation. If the Engineer confirms the instruction, then the Contractor “shall comply with…the Engineer’s response”. If the clause ended there then if the Engineer maintained its position that the instruction constituted a Variation then it would seem to be open to the Contractor to then challenge that decision by making a claim under Sub-Clause 20. 1(c). But the clause goes on: and states: “be bound by the terms of the Engineer’s response”. What does that mean?
Scope of Variations clause • In the 1999 form there is no restriction on the nature or scope of additional work that can be instructed as long as it is a “change to the Works”. – 1876, Lord Cairns Thorn v London Corporation distinguished between additional or varied work that was contemplated by the contract, and work that was not. He described work not contemplated by the contract as “additional or varied work, so peculiar, so unexpected, and so different from what any person reckoned or calculated upon, that it is not within the contract at all” and concluded that such work would not fall within the variation clause. 10
1 1 Cardinal change • In the United States a “cardinal-change” doctrine has developed. Initially it referred to the legal principle by which a contractor is released from the obligation to work under the terms of a government contract if the government has made a major or cardinal change to that contract by directing the contractor to perform work not within its general scope.
• 2017 • Contractors now have an express right to object when varied work was “Unforeseeable having regard to the scope and nature of the Works described in the Specification” Unforeseeable – not reasonably foreseeable by an experienced contractor by the Base Date (28 days before submission of Tender)
Engineer’s power • Promptly after receiving the Notice, the Engineer shall respond by giving Notice to the Contractor cancelling, confirming or varying the instruction. Any instruction so confirmed or varied shall be taken as an instruction under 13. 3. 1
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