Construction: If something is in a BoQ, but not needed when designed, can a client later deduct it from costs?
In this scenario, the Contract is a lump sum and not subject to re-measurement. The Bill of Quantities (BoQ) was prepared by the Contractor at tender stage.
During the course of the project, some items listed in the BoQ were not provided. This is because the items were not included on tender drawings, shop drawing or final as-built drawings.
However, the Client deducted these items as an omission at final account stage. They stated this was because the Contractor did not complete any of these billed works. The Contractor disagrees and says they took the risk on the lump sum contract. The Bill of Quantities was merely for guidance and valuation only.
So…
What are the Contractor and Client’s entitlements under FIDIC for this scenario?
What should be the stance of the Contractor on this matter?
Is the Client entitled to omit the value of the BoQ items not fulfilled by the Contractor despite it being a lump sum contract?
This a fairly typical scenario that I have come across on several occasions. It arises from the Employer/Engineer wanting both to have their cake and eat it too.
The Devil is in the Detail…
You will, of course, need to check the details of the actual contract. However, based on a typical FIDIC form, where the Contract has a lump sum price:
- The BoQ is usually stated in the contract to be an estimate. It is usually not to be relied upon and is only for evaluating monthly progress and variations.
- The BoQ is usually way down the order of precedence stated under Sub-Clause 1.5 (Priority of Documents) and below the specification and drawings.
- This is a lump-sum contract. Therefore, the lump-sum is defined by what is shown on the drawings and included in the specification.
- If therefore, something is not shown on the drawings or specification but is in the BoQ, it is not part of the Contract or the lump sum price and cannot be deducted.
The best way to illustrate this is by looking at the reverse scenario. If something is shown on the drawings, but not listed in the Bill of Quantities, would the Engineer/Employer pay for it as a variation? I doubt it very much.
This piece was originally written by Andy Hewitt of Claims Class, reproduced here with permission.
