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FIDIC 1987 reprinted 1992 Clause 52.2

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Anthony Scarlett
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Does anyone have any experience of the application of the second paragrpah of 52.2 in the 1987 Civil FIDIC?

The pargraph states:

"Provided also that no varied work instructed to be done by the Engineer pursuant to Clause 51 shall be valued under Sub-Clause 52.1 or under this Sub-Clause unless, within 14 days of the date of such instruction and, other than in the case of ommited work, before the commencement of the varied work, notice shall have been given either:

(a)by the Contractor to the Engineer of his intention to claim extra payment or a varied rate or price,or ..........."

My question is does this only apply to a rate change or does it apply to generally claiming ANY additional payment even if it is simply applying a contract rate to an additional quantity?

As you may have guessed, I have not notified under the Clause although I have notified under a different clause for some of the variations but not all.

Any thoughts?

Cheers,

Anthony

Replies

Andrew Flowerdew
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Antony,

FIDIC along with it’s sister ICE versions are the most one sided standard form of contracts that exist in the construction industry - and it’s all in the favour of the Employer and Engineer, hence why they like and use it. The institutions looking after thier own springs to mind.

Even RIBA contracts which were once heralded the most one sided contract by a judge no less is now probably abit fairer.
Stuart Ness
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Tony
Welcome to the real world!!-)

Contracts - even bespoke ones that are mutually agreed to by Parties starting with a clean sheet of paper - are always open to interpretation. Look on it as ’work in progress’; there is now a revised set of FIDIC Conditions (1999)that are now being used in place of the older versions.

Stuart

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Anthony Scarlett
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Is it just me, or is FIDIC full of inconsistencies, conflicts and drafting that at best requires interpretation?

Why is it revered so highly in the industry? So far I am less than impressed by it.
Stuart Ness
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Tony,

Clause 52.1 unambiguously states that work included in variations is first valued in accordance with the rates and prices contained in the Contract.
If there is no rate or price in the Contract for work that is additionally instructed, then new rates or prices based on those currently existing are to be used. Or the Parties may mutually agree suitable rates and prices between them. Clause 52.1 does not set out formal notice requirements as part of this process.

If, however, such agreement between the Parties is not possible, or if the nature of the additional work is so different from the original work, then the Engineer has the power under Clause 52.2 to fix such rates as he considers appropriate. But Clause 52.2 does not apply until either the Parties cannot agree on an applicable rate, or if the additional work is so different that the rates cannot be based on the original rates and prices.

In such circumstances – where new rates cannot be agreed – the Contractor must give 14 days notice of his claim for additional costs, based upon his preferred rate, which is presumably greater than the rate that the Engineer is prepared to pay.

Note that Clause 52.1 confirms that:
“If the Contract does not contain any rates or prices applicable to the varied work…suitable rates or prices shall be agreed upon between the Engineer and the Contractor.”

Therefore the facility of mutually agreeing the new rates and prices is accommodated under Clause 52.1, but in the event that it all goes pear-shaped, Clause 52.2 gives the Parties the ability to formalise their positions (by giving 14 days notice), and furthermore gives the Engineer the power to determine the rates on a provisional basis until such time as they are agreed.

The mechanics of agreeing new rates and prices are set out in Clause 52.1, and there is nothing there that requires notice to be given in regard to establishing the Parties’ positions on new rates or prices. If, however, the Contractor insists on an extra payment that is not based on rates or prices that are either in or are analogous to the contract’s rates and prices, then I suggest that he must give notice of his additional claim in accordance with Clause 52.2.

By the same token, if the Engineer intends to apply his power under Clause 52.2 in determining a new rate or price, he must give notice thereof to the Contractor.

Hope this helps,

Cheers,

Stuart


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Stuart Ness
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Anthony,

The second paragraph of Clause 52.2 requires that “…notice shall have been given…by the Contractor to the Engineer of his intention to claim extra payment or a varied rate or price…”

If you have given notice, albeit under a different Clause, I would still argue that you have complied with the notice requirement as set out in Clause 52.2 on the basis that the second paragraph thereof simply requires that notice be given.

However, the requirement to give notice under the second paragraph of Clause 52.2 is in regard to the Contractor’s intention to claim extra payment for additional work that is so different from the work included in the original Contract that the existing rates and prices are considered to be inapplicable.

Giving notice under Clause 52.2 would not be required where an existing contract rate or price is used, since the Engineer has the power only to fix rates under Clause 52.2 in circumstances where there is no existing rate. Therefore, if your problem is related to the use of an existing rate, then Clause 52.2, including the provision of notice thereunder, is inapplicable.

Hope this helps,

Stuart


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Anthony Scarlett
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Stuart,

(Should have said this in my last post).

My concern is founded on the fact that the 2nd paragrpah of 52.2 states that "no varied work instructed to be done.... shall be valued under SUB-CLAUSE 52.1 or under this Sub-Clause....".

Clause 52.1 is the bog standard "rates and prices set out in the Contract" clause and therein lies my concern.

Hope this clarifies my previous post.

Cheers,

Tony
Anthony Scarlett
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Stuart,

Your answer is excatly the answer that I want and I don’t doubt your experience in such matters as your posts on this board are always clear concise and sensible.


However, my concern is that the clause could be interpreted to mean that a notice is required for every occurence regardless of whether rates and prices exist in the contract or not.


Am I wrong to be concerned?


Regards,

Anthony