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Lump Sum Contract.

7 replies [Last post]
Tue, 2009-03-17 06:58
toh michael
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Joined: 17 Mar 2009
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Groups: GPC Malaysia
Dear All hope can have some further elaboration in this ..
1) how many type of lump sum contract we have ?

Currently we have a contract previously being sign as Lump Sum contract with a detail BOQ breakdown with quantities and unit rate for a ID construction project.

Current stage project finish 100% and the consultant QS is start to measure everything inside the BQ as compare to the as built at site.

What will be the stand : -
1) stop all the remeasurment of the contract carried out by the consultant QS ?

2) Limit the consultant QS only remeasure those item fall under VO only.

Kindly advised..

Cheers
Toh

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Replies

Sat, 2009-03-21 18:35
#1
soumendu ghosh
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Dear Toh

I agree with Samer & Charlestone. If you have a ’signed’ L.Sum Contract then the ’remeasurement’ clause is not applicable for the contract drgs. However, if there are variations, they need to be remeasured and appropriate rate (BOQ rate for contract items & new-agreed rate for non-BOQ items) is applicable.
Read the Contract ’thoroughly’ & check for any ambiguities. You have mentioned about the role of the QS. What is the Engineer’s opinion ?
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Thu, 2009-03-19 14:49
#2
Samer Zawaydeh
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Groups: Civil Engineering, Regional Representatives
Dear Toh,

You are correct, if the Design Drawings were not changed during the execution stage, then the Price of the Lump Sum will remain the same.

You need to watch out for agreements not written in the Contract but were made verbally prior to the Contract betweent the two parties. Contractor might be obliged to listen to the Owner because of friendship and to maintain the business relation.

Best Regards,

Samer
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Thu, 2009-03-19 13:41
#3
toh michael
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Joined: 17 Mar 2009
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Groups: GPC Malaysia
hi samer

For the VO there is no problem on it as I constantly highlighted to the owner .

Current stage is even those item stated inside the original boq but there is no changes on the drawing and as built the client start to remeasure all the qty . Yes I agreed some of the qty we did over quote it by more than 30% so what ? After all is a lump sum contract , all checking of qty the QS consultant should have check it before the lump sum contract award to us .

To be frank we did price in the wastage inside the qty instead of the unit rate. As such all the qty actually does not reflect the actual site as built .

The argument is there is no provision under the contract for the owner to conduct remeasure except for the VO .















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Wed, 2009-03-18 14:18
#4
Samer Zawaydeh
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Dear Toh,

First you need to read your Contract thoroghly and check how you can claim for variation.

If the Contract is silent I would recommend that you start sending notice of change to the client as soon as they instruct you to change anything in the Contract. If the client is not providing you with additional money to complete the changes, then you need to decide with is in your best interest and act accordingly.

Make sure that you document all the variations and that you send the details to the client with the cost of change updated in each monthly report.

Best Regards,

Samer
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Wed, 2009-03-18 12:37
#5
toh michael
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Groups: GPC Malaysia
hi all thanks for your advise.

Currently the owner is not agreed on the quantities inside the original boq by giving reason he only agreed to pay what ever have been done with appropriate wastage .

I think is too late for the owner to say so as lump sum contract already been signed and work completed !!

They should have check the qty before it award to us . . And the worst part is consultant QS keep quiet .

Do we as a contractor have a very strong point to stand firm ?





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Tue, 2009-03-17 16:40
#6
Samer Zawaydeh
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Dear Tol,

The confusion that you describe is because of variations that are happening to the Lump Sum Contract.

You need to check your Contract clauses for the procedure to handle these variation. Usually the BOQ rate that are mentioned in the original contract are used to price similar items.

Best Regards,

Samer
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Tue, 2009-03-17 07:08
#7
Charleston-Joseph...
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Hi Michael,

Basically, Lump Sum contract should not be re-measured.

But there are some variant:

Lump Sum with res-measured concrete quantities, steel quantities, finishing quantities, depends upon the wording of the contract.

Lump Sum contract with re-measured provisional quantities / provisional sum (by the name provisional, it conotes re-measurement or upon the discretion of the client representative).

With regards to VO, usually, it start with PVO, Provisional Variation Order. Upon completion, then, the whole scope of work was known, then, that is the time that it will becomes a variation order. so no need to re-measure the variation order.

Cheers,
Happy Planning and Scheduling
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