How To Calculate The Recovery Of Preliminaries On A Reduced Scope Of Works

I was recently contacted by a blog reader who requested some advice on a project in Qatar where the Employer omitted a large part of the Works and also wanted to deduct money from the Contractor’s preliminaries as part of the price adjustment. I thought that this would make an interesting case to share with the rest of our readers so… The scenario was as follows: The Contract Price is a Fixed Price Lump Sum. The Contract Bill of Quantities contains all-inclusive rates which include preliminaries, overheads and profit. No separate prices for preliminaries are included. After approximately 75% of the works were completed the Employer omitted a large portion of the balance works, which will not be completed by others. Whilst the Contractor recognises that the Employer is entitled to a saving for the omission, the Employer wants to evaluate the omission at the full Bill of Quantities rates for the omitted items which, include for preliminaries. The Contractor believes that whilst the…

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‘Thickening’ Of Preliminary Items

It is generally accepted that in a situation where a contractor is entitled to an extension of time, he is also entitled to claim for time-related costs for site overheads and head office running costs for the additional time that he was obliged to remain on site. This is based upon a fundamental principle of law, that a party who has been prevented from performing his obligations by the other party, is entitled to compensation to put him back into the position that he would have been had the act of prevention not occurred. In construction terms, this usually means the reimbursement of the contractor’s costs for the extended time in providing site management, site establishment, plant and equipment, insurances, additional financing costs head office costs and the like, which are usually priced in the preliminaries section of the bill of quantities. Are there situations that a contractor may legitimately claim for additional resources, as opposed to the existing resources being…

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The Preliminaries to the Claim

The object of a claim document is to convince the respondent that the claimant is entitled to an award and the quantum of the award. It must also be remembered that the onus is on the claimant to prove his case. To help this objective it is vitally important to ensure that any reviewer of the claim who is not familiar with the project or the circumstances of the claim may properly understand the claim. To achieve this, we must ensure that the document includes all the information that is necessary for a proper understanding of the matter and the document must lead the reader to a logical conclusion. Failure to comply with these two key points will at best lead to delays in settling the claim or, in the worst case, a rejection of the claim. The Institute of Construction Claims Practitioners has a detailed paper on this subject. To request a copy, please send an email with your contact details to hello@instituteccp.com with "Preliminaries" in the subject line. Enjoying the ICCP's…

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