This is the tenth in a multi-part series on notices under the 2017 Edition of FIDIC Silver Book. This post covers the provision for notices in Clause 13 (Variations and Adjustments) and Clause 14 (Contract Price and Payment).

Clause 13 (Variations and Adjustments)

Sub-Clause 13.1 (Right to Vary). The Contractor shall be bound by each variation instructed and shall execute it without delay unless the Contractor promptly gives a notice to the Employer stating his reasons. If a notice is given, the Employer shall respond by giving a notice to the Contractor, cancelling, confirming, or varying the instruction.

Sub-Clause 13.2 (Value Engineering). The Contractor may submit a written proposal for Value Engineering if it benefits the Employer. The proposal shall be prepared at the cost of the Contractor, including all details. The Employer shall respond by giving a notice of the Employer’s consent or otherwise.

Sub-Clause 13.3.1 (Variation by Instruction). The Employer may instruct a variation by giving a notice to the Contractor in accordance with Sub-Clause 3.4 (Instructions). The Contractor shall proceed with execution of the variation and shall, within 28 days of receiving the Employer’s instruction, submit to the Employer’s Representative detailed particulars.

Sub-Clause 13.3.2 (Variation by Request for a Proposal). The Employer may request a proposal before instructing a variation by giving a notice to the Contractor. The Contractors shall promptly respond to this notice, either by submitting a proposal or by giving reasons why the Contractor cannot comply by reference to the matter as described in Sub-Clause 13.1 (Right to Vary).

Sub-Clause 13.4 (Provisional Sums). If the Employer instructs a Contractor to submit details as stated for each provisional sum, it may be quotations from the Contractor, supplier and/or Subcontractor for all or some of the items of the work to be executed or other things to be purchased, then the Employer may respond by notice either instructing the Contractor to accept one of these quotations or revoking the instruction. If Employer does not so respond within seven days, the Contractor is entitled to accept any of these quotations at his discretion.

Sub-Clause 13.6 (Adjustments for Changes in Law). If any adjustment to the execution of the Works become necessary as a result of any change in the law that leads to delay or increase in cost, the Contractor shall promptly give a notice to the Employer. Alternatively, if there is a decrease in cost, the Employer shall promptly give a notice to the Contractor. Thereafter, the Employer shall either instruct a variation under Sub-Clause 13.3.1 (Variation by Instruction) or request a proposal under 13.3.2 (Variation by Request for a Proposal).

Clause 14 (Contract Price and Payment)

Sub-Clause 14.6.1 (Notice of Interim Payment). After receiving the Contractor’s statement and supporting documents, the Employer shall give a notice of amount considered due within 28 days.

Sub-Clause 14.6.2 (Withholding Amounts in an Interim Payment). If the Employer wants to withhold an interim payment, which would be less than the minimum amount of an interim payment stated in the Contract Data, the Employer shall promptly give a notice to the Contractor with his calculations of the amount and reasons.

Sub-Clause 14.6.3 (Correction or Modification). If the Contractor was or is failing to perform any obligation under the contract, the value of that may be withheld until it is performed. The Employer will promptly give a notice describing the failure with supporting particulars.

If the Contractor considers that interim payment does not have any amounts to which he is entitled, these amounts shall be identified in the next statement as “identified amounts”. The Contractor, by giving a notice refers this matter to the Employer’s Representative under Sub-Clause 3.5 (Agreement or Determination) shall apply. The Employee shall then make any correction or modification that should be made in the next interim payment.

Sub-Clause 14.11.1 (Draft Final Statement) The Contractor shall submit a draft final statement within 56 days after the issue of the Performance Certificate, which shall include:

  1. The value of all Works done,
  2.  any further sums due at the date of issue of the Performance Certificate, and
  3. any other amounts that have or will become due after the issue of the Performance Certificate, and amounts by reference to the matters like Contractor’s claim for Extension of Time, any matter referred to the DAAB and any matter to which a Notification of Dissatisfaction has been given under Sub-Clause 21.4 (Obtaining DAAB’s Decision).

Except for any amount under number 3 in this list, if the Employer disagrees with any part of the draft final statement, he shall give a notice to the Contractor who shall then submit such information within the time stated in the notice and make changes in the draft as may be agreed between them.

If the Contractor fails to submit a draft final statement within 56 days, the Employer shall request the Contractor to do so. If the Contractor then fails to submit it within a period of 28 days, within a further 28 days after this, the Employer shall give a notice to the Contractor stating the final payment with supporting particulars.

Sub-Clause 14.13 (Final Payment). Within 28 days after receiving the final statement and discharge the Employer shall give a notice of the amount considered finally due. The Employer then makes the payment within 56 days after receiving the final statement and discharge.

This is the tenth in a multi-part series. Part one, a brief introduction to Notices under the FIDIC Silver Book can be read here, part two, covering objectives and errors can be read here, part three on Clauses 1-3 can be read here, part four on Clause 4 can be read here, and part five on Clauses 5 and 6 can be read here, part six on Clauses 7 and 8 can be read here, part seven on Clauses 9 and 10 can be read here, part eight on Clause 11 can be read here, and part nine can be read here. The next installment will cover Clause 15.

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the first post in a multi-part series and was originally published as three LinkedIn videos, viewable here, here, and here