1) The disclaimer does not work. He has given you information which you have used to give him a lower price. Having obtained the lower price he cannot take it away. (I have told you but i did not say it)

2) It contradicts with the constarctor's responsibilities to examine etc, as far as "practical" given "time and cost" at the tender stage.

 

Well done Daryll
EOT should say whether the extension was working or calendar days. It should also state the new contract completion date.
Its difficult to speculate on this one unless this info is provided or unless you got what you asked for.
Clive

I do hope that along with your contract extension, that you also received 111 days of compensable overhead expenses.

Daryll
Would be interested to hear how this turns out
Kind regards
Clive

Clive,

I agree with your thoughts and would fully expect the CRE to go to ground and dig his heels in - human nature I’m afraid. A certain amount of pressure has to brought to bear though and the contractors case proven in order for the CRE to be prepared to consider his position, or as you suggest find a way round it. The EoT is important to get as is the cost of any rework.

I’d still maintain the contractor giving him abit of a beating along the lines I’ve suggested and see what he does. The next tactical step, assuming he does as predicted and dives for cover, is to write him a letter that he can’t answer himself (or would be very foolish to attempt to) and therefore to force him to pass the issue on to someone who will gather all the information and come to an informed decision!

Andrew
I hear what you say about the CRE, however I feel that if at all possible an escape route must be provided for him. On the face of the problem he has scr**ed up. Not unusual but the contract has been manipulated possibly badly to protect the Client. If the client feels he wants this protection and the engineer has written the contract all be it badly to provide it he will not act impartially. To so do would suggest that he admits his failure and we all know engineers never make mistakes especially CRE,s. So my advice was if at all possible to find a solution and in the meantime keep the evidence and get as much of it as you can, because under this set up the CRE will protect hard and arbitration may be the only solution.
As I said a nod and a wink may be the best outcome, and if you have an inclement weather clause this may prove beneficial for extensions etc.
Once again I understand your point Andrew.

Darryl
Good to hear the original design was approved I would suggest this is a valuable document.
I would make a note that the interview took place between the PE and RE get the PE to respond to a letter from you regarding what was said at that meeting. It may have occured some time ago but he may have handwritten notes etc if not he will have to recall from memory. If the RE has left and you know where he is a conversation or better still a written note from him regarding the meeting content would be usefull. The fact the RE quizzed your PE on parameters which could only have been obtained from the SI is important as is his approval based on the SI. It brings that document into the realm of a document used in the contract and undermines the argument that a skilled contractor blah blah blah.
When you value the piling you should consider a rate increase for greater depth due to heavier equipment more friction etc etc. Driving to set takes longer even if the length were the same you have to prove blow the pile. Also a longer pile may require to be made up of shorter pile sections requiring connection thus additional time and cost. Perhaps you will also need a service crane to assemble the lengths also extra cost. Dont use the same rate if the pile is longer seek to change the rate.
Due to the soft clay a thicker piling mat may be required im sure it will be otherwise you will lose the rig add that to the piling rate. If you can build the problem of time and cost into the piling rate it may be easier to accept.However note both the client and the CRE have fiddled with the contract to btry and make you responsible for ground conditions and they wont lay down quietly.
As for the sheet piles being in the excavation rate thats a problem and potentially a blessing. On the face of it the softer material may be easier to excavate so a reduction in part of the cost however the sheet pile rate increases due to the anchor changes, as he cant say what you allowed unless you gave him a breakdown you can manipulate the increase in your rate due to harder or different methods for excavating in very soft ground maybe even long reach excavators etc etc.
Notwithstanding this it would appear to me and I bow to Stuarts and Andrews experience here that you can sustain your claim for time and cost as there appears to be a de facto case that everybody post award relied on the original SI.
Stuart Andrew over to you
Clive

Andrew Stuart
I can see the points you are raising are extremly valid however the mindset here of the CRE is important. The last resort I feel is to back him into a contractual corner after all there is a longer term relationship to consider with both him and the client.
My idea of going after the person responsible for the SI was not founded on the contractors ability to chace a party he has no relationship with but of one that this may releive some pressure on the Engineer who himself based his design on the report. IE the short piles and then the removal of the piles.
As a matter of engineering L&M an contractor working in this area successfully use a system of cementitious ground improvement to stabalise the soils you are dealing with. It has been used very successfully in Singapore. This may be a face saver for all as it changes the design, produces I believe a cheaper alternatrive to piling to set and does not require the sheet piles at all. It also avoids disturbing too much ground which appears to be contaminated. Outside the contract issues under discussion but a possible face saver for all.
Turning back to the matter in hand I was interested to note that your sheet piles was remeasured item. (I have reread what you have written Daryl and this may not be the case) As such the fact that your tender design was not adequate should not matter. What appears to matter is that you went forward and excavated without carrying out your own SI and one assumes based your design on the Engineers SI. The fact that your point iii letter appears to instruct you during the contract to do this. From another angle was the design approved and if so by whom. The friction coefficient used was based I guess on the tender SI report. The CRE perhaps even an ICE signed off on this design and you proceeded on this basisi. Did you ask during the design period ie after award of contract for the SI report. Was it given to you formally by the CRE. There seems to be some grounds here if the design was based on a report subsequently issued after award of contract or a design which was approved by the Engineer after award based on the SI report.
Assuming the design was not approved and the report was not issued under the contract and you designed on some basis unknown. The sheet piles were installed at the design length and you were paid. Excavation commenced and the anchors and wall started to fail. Who stopped the work?? If the engineer stopped the work what did he say? Lets assume you stopped the work what did you say. The sky is falling in Mr CRE what do I do, or our design is wrong we will redesign after we have completed another SI assuming you were not instructed to carry out the SI.
So you carried out the SI and redesigned your work did you resubmit the design was it approved did you send the SI to the CRE was it approved? From your letters I, II, III it appears the CRE stood behind the original SI even though ground conditions were proving something different. He is therefore saying that you should and could rely on the SI. This to me brings the SI into the contract documentation. Stuarts and Andrews arguments then prevail on reliance and you prevail.
How do you get out of the hole with limited damage to all
Obviously you have to backfill remove the anchors and extract some piles and redrive. The removed piles are additional expense possibly not payable so are the anchors. the balance of the piles can be extended and should be paid for under the remeasure (if I understood you) as should the additional anchors. The commercial loss is therefore the extracted piles which hopefully can be reused and therfore the loss is the driving cost and the anchors. Yes
I know Stuart Andrew there is a time element.So add that on. Now dependent on the answers above this may be simply reimbursable. The redesign was due to the ground conditions, (by the way are you responsible for temporary work design very strange if it is remeasured) and therefore should be awardable the lengthening should be claimable if not why not. Perhaps because you accepted the site as was. as you are getting the time for the permanent piles maybe there is no delay as you can install the sheet piles at the same time, that solves an issue if it is possible. What about the permanent piles. I am assuming you have to install from original ground level.
So in conclusion there are a huge number of questions to (by the way the valuation or claim question I asked earlier has not been answered.) answer all of which have a bearing on the matter. I would reiterate before you go for the commercial jugular see if there is a way out. Look at the real delay. You may be able to recover a good proportion of your costs if the sheet piles are remeasured, look at the additional rate for lengthening the piles and swing some money in there if you can ditto the sheet piles and anchors, see what you can do with the extra time for the installation of the anchors etc. If you can try to work with the CRE he is in the doo doo and if a suitable lifeline can be found both of you could turn a disater into a success.
If all that fails maintain your contractual position and get some legal advice. Above all else keep scrupulous records of what you are doing and get them signed every days by the CRE for record purposes.
Having reread all the postings after writing most of this I feel the engineers insistance during the contract to use the SI from the tender is the key. Clearly he accepts it is correct and as such you can base your design on it. Seems to me and im just a planner that you have a good case. HOWEVER its Malaysia and a nod and a wink may be the best result
Clive
Im still thinking

Stuart,

I’m from a contracting background so I would like to agree but on occassions that "half-arsed attempt to block the Contractor’s due entitlement in a lower level priority backwater clause." has managed on the facts put in front of a judge to do just that.

Andrew,

I accept that the principle argument of the CRE is that the Contractor is not entitled to rely on the soils info given at tender. However, I don’t accept that that is what drives the Contractor’s entitlement.

I believe that the Contractor’s entitlement is driven by Clause 12.2 of FIDIC, and that this is not diminished by a half-arsed attempt to block the Contractor’s due entitlement in a lower level priority backwater clause. True, it does mean another hurdle for Darryl to overcome, but in my view, it does not remove his entitlement. Nor does it impose the responsibility for the Site Investigation upon the Contractor. (Does ask me where that responsibility lies – probably covered in soft clay – but ’contra proferentem’ bells are ringing!!)

Hope you have a great weekend too. ;-)

Cheers,

Stuart

Darryl,

It may not be that bleak, just trying to make the point that it is in some circumstances the Contractors choice whether he relies on the SI data at tender - often a point not appreciated by people. It’s often thought, the Engineer sent it as part of the tender so we can rely on it come what may - how wrong they are.

You don’t say whether your letters were pre or post contract agreement.

Letter (iii) appears to be a good one - if it can be shown that the Engineer instructed you to rely on the borehole information, you may have him where it hurts most! Ouch!!!

One thing I didn’t mention before is although this disclaimer exists, the contract has to be read as a whole. You also mentioned the clause was in the specification, not the conditions of contract. May or may not be of importance.

If it gets to the point of arguing contract conditions, read EVERYTHING and list ALL those clauses that may help your case AND ALL those that work against you. The most common mistake people make is jumping at one clause that helps them and hanging thier hat on that. You have to consider ALL the clauses, good or bad, and reconcile those that work against you before you can conclude whether your case is good or not.

Darryl,

That seems pretty clear to me -

The story goes something like this. Employer has a soils investigation carried out. Engineer sends report out with tenders as information available about the project. The soils report or tender documentation has a disclaimer in it saying it is only interpretive and can not be relied upon.

Contractor receives tender and soils report. The contractor reads soil report and disclaimer. (and if he missed the disclaimer it’s his fault) The contractor now has to decide to the extent he wishes to rely on the soils report. We all know in 99.9% of cases this will be 100% reliance but that’s the contractors choice and risk. What he should do is evaluate the report, decide if there are any critical areas (eg like where he is going to support his temp works) and seek further information if he thinks it needed - this may be from the Employer or by his own additional SI.

Now, if for example, access for further SI is not available and he can not obtain further information then he has a good case for saying he had to rely on the original soils report. Alternatively, if the soils report is unambiguous, eg there’s sand for 10m and the report could only be interpreted one way then if it turns out differently he has a good case for why he relied on the report. The contractor may also have expressly or impliedly indicated to the Engineer during the tender period that he has relied on the report or certain aspects of it and therefore the Engineer would most likely have to stand by this later as he had prior knowledge of the contractors intent.

Unfortunately you won’t find much about this in books as every case depends on it’s own individual facts.

I could pick holes in the clause such as it refers only to restricting (but not barring) claims for obstacles and therefore differing soil condition claims are unrestricted etc.

I would still suggest that your best option is to use the position talked about earlier before going down the route of arguing the legal niceties, although be prepared for this as that’s what it may come to.

Stuart,

The principle arguement of the CRE is that the contractor is not entitled to rely on the soils info given at tender. If that is the case, the contractors claim fails, if the CRE is wrong, then the contractors claim stands.

I agree the contractor should put in a claim, but until the above point is decided, I wouldn’t hold my breath counting on the claim.

If the contractor is entitled then he can claim misrepresentation. Most soil reports I’ve come across have a disclaimer buried in them somewhere and therefore I’m not going to bet on the outcome of this without knowing more.

If the soils report was bound in the contract then it would be somewhat clearer but then I guess Darryl wouldn’t be having the problem he is.

Stuart,

Your statement "is that the Contractor relied (and was probably induced to rely) upon the correctness of the contents of the SI Report." has one critical word in it - PROBABLY, and we don’t the answer to that.

If he was entitled to rely, then everything else flows from that. If he wasn’t, nothing flows from it and it fall down like a stack of cards.

Darryl,

Thanks for the added info and clarification!

Andrew,

As Darryl pointed out in his original post, it doesn’t appear that the SI info was incorporated into the Contract documentation, but I think that is a moot point!! ;-)

What is more important, I suggest, is that the Contractor relied (and was probably induced to rely) upon the correctness of the contents of the SI Report.
Based on this reliance, the Contractor produced his Price and Schedule for carrying out the Works, including the time and cost of executing the subject Temporary Works.
During the progress of the Works, it later became evident that the SI information relied upon for the safe execution completion of the Temporary Works was defective.
Therefore, the Contractor should be entitled to claim for the additional costs and time incurred as a direct result of the defective SI Report.

I agree with you that the Contractor should go very hard against the CRE in this case; indeed I suspect that the CRE is bluffing and stalling for time! We don’t know if he is implicated in the defective information contained in the defective SI Report – I have been in situations before where the RE’s company screwed up the original SI Report and there was lots of eggs on faces!! ;-)

Cheers,

Stuart

www.rosmartin.com

Stuart,

I agree with what you say Stuart but as is often the case when the soils investigation or the interpretation of it is wrong, the first thing the CRE tries to hide behind is that they don’t warrant or guarantee the tender information to be correct. We all know the contractor relied upon it at tender and designed his temporary works accordingly. Was he entitled legally to rely on it is a different matter.

As the law stands (UK anyway) in general, is any representations made prior to the contract, if intended to be relied on and part of the contract, should be bound into the contract. Hence, soil reports, method statements, programmes, etc are not usually bound into the contract as if they are, they take on a completely different contractual meaning. To establish if the contractor could rely on the tender soils report and hence claim, you would have to have sight of all the tender correspondence associated with it and establish exactly what was said and done. Without that information you’re guessing. And what the law in Malaysia is might be completely different. Certainly in the Middle East, the contract is the contract and nothing said or done prior to the contract counts for anything. And come to that, was the contract made in Malaysia or elsewhere, we do not know. Who’s legal jurisdiction applies?

The actions of the CRE are pointers as to how he thinks - he certainly isn’t going to stand by his own work or information so be warned. Thats one of the reasons I would go in very hard at this point - so that he thinks twice about similar tactics in the future. Unfortunately sometimes it has to be done.

Clive,

This is purely a case of reliance (or not) on tender soils information not bound into the contract. The change in design may help prove your case but is irrelevant to the core problem.

Clive,

The Contractor’s remedy will be against the Party with whom he is in Contract, the Client or Employer.
The CRE (Client’s or Consultant Resident Engineer – not sure which terms are used in this instance!!) is the representative of the Client or Employer. So the CRE isn’t the one being ‘got at’; the Contractor will ‘go after’ the Client/Employer, but he has to communicate through the Engineer, as set out in Clause 2 of FIDIC.

This situation appears to revolve around the Contractor having been given important sub-soil information upon which he designed and constructed his Temporary Works. That sub-soil information appears to have been given to the Contractor by the Client/Employer (or his Representatives), but the information turns out to have been defective, because it failed to identify soft clay that in fact was present.

As a direct result of the failure of the identification of the sub-soil clay, the Contractor has suffered from additional costs and loss of time.

The CRE – probably feeling both foolish and defensive – has said that the Contractor should have foreseen the existence of the clay that was hidden underneath and that was not identified in the sub-soil information. My view is that if it was foreseeable by the Contractor (which I doubt is the case) why was it not equally foreseeable by the CRE?

In addition, I hold to the view that the Contractor is fully entitled to depend upon the information related to the sub-soil that was given to him at the time of tender; the Contractor had no reason to question the veracity of the sub-soil information, and he is entitled to rely upon the reasonable expectation that the sub-soil information was correct.

Hope this helps,

Stuart

www.rosmartin.com

I would suggest that even if the SI Report was not incorporated into the Contract documentation, it still constitutes representation upon which the Contractor was entitled to rely, and use as a bona-fide basis for the design and construction of his Temporary Works.

In addition, the CRE now appears to consider that the Contractor should have foreseen that the location in question had soft clay. I would ask the CRE why, if this is the case, was it not equally foreseeable by the CRE? Many people forget that the construction process is a team, not an adversarial, process, so if it was foreseeable by the Contractor (which I don’t think it was!), then it must have been foreseeable by the CRE!

Hope this helps,

Stuart

www.rosmartin.com

Darryl,

You should keep in mind that the Contractor is entitled to rely upon the accuracy of any information that is provided to him as part of the tender (or related) documents, even though that information is not part of the Contract documents.

Therefore, if the Contractor has acted in all good faith and assuming that he has properly interpretated the Site Investigation data made available to him, then he should be in the clear. There is not an obligation on the Contractor to re-do the original SI nor verify it; nor should he be expected to assume that the original SI was defective (as it clearly was!)

Clause 12.2 of FIDIC allows an EOT claim where the Contractor encounters physical conditions that were not foreseeable by an experienced Contractor. In being supplied with a SI at the time of tender, which the Contractor was entitled to believe and upon which he was entitled to use as a basis for the design of his temporary works, the SI sets out the broad nature and extent of the foreseeable ground conditions.

If reality proves to be otherwise, then the original SI is clearly at fault, then the Contractor should be entitled to the additional costs and time that flow from the defective SI.

Under FIDIC (and most other Forms of Contract) the Contractor cannot be expected to assume the risk and responsibility for the correctness of a SI at tender stage (unless the Contract specifically enforces this obligation on him, and in such a case the Contractor must be given the opportunity to verify the original SI).

Your Consultant Engineer is not correct in his assertions Darryl, and you need to press your case. In addition, he is probably in the firing line if he or his Company is responsible for the defective SI.

Hope this helps,

Cheers,

Stuart

www.rosmartin.com