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Schedule of Prices vs. BOQ for a Lump Sum FIDIC 99 Red Book Contract?

5 replies [Last post]
Cagdas Evren Bayrak
User offline. Last seen 4 weeks 1 day ago. Offline
Joined: 16 Oct 2008
Posts: 6

Dear Collegues,


We are the PMC of a multi-use development project. The Client intends to go into a lump sum contract with FIDIC Red Book 99 form. The design will be 100% complete before going into tender. The Designer has prepared a BOQ and Method of Measurement along with Specs and Drawings.

I think that:

a)The tender documents should only include a Schedule of Prices, together with Specs, Drawings.. etc. (No BOQS and Method of Measurement).
b) I dont actually suggest any BOQ to be incorporated whatsoever. Nevertheless, if insisted, I may not object the Contractor (after the tender is awarded) is given the BOQ prepared by us (with or without quantities) to provide breakdowns for his lumpsum price. This BOQ will be non-contractual and for only valuation of variations.. etc.

Some others think that:


a) The BOQ and MOM will be submitted during tender phase, but it will be stated that the contract is Lump Sum. Payments will be made as per BOQ items.

I strongly believe that using a BOQ instead of a Schedule of Prices for payments has no use, especially considering that the design will be 100% complete, i.e. changes are not likely to occur. A Schedule of Prices itself is very useful for Cash Flow Calculations, Scheduling etc. as well.


I am also of the opinion that, submission of BOQ's during tender phase gives Tenderers the impression that (even clearly its purpose is stated) the BOQ is contractual, and it is hard to explain people that, they are supposed to do everything written in their contract as "lump sum" but get paid on BOQ items basis. It has, and it will, mislead people to think that their responsibilities are bound with what is stated in the BOQ.
I think that, in lump sum contracts the payments / remuneration shall ne through a "Schedule of Prices". If still a BOQ is desired for valuations, etc., it might be requested after the Tender is awarded, i.e. from the Contractor, not the Tenderers. I seriously hesitate on using "Lump Sum Contract with Bill of Quantities" even though it's widely used, especially in the Gulf region.

What do you suggest on this one? Is a Schedule of Payments alone the best solution, or can both (BOQ & SOP) be used? Can you give further recommendations as it will be a FIDIC Red Book 99 type of Contract?
 

I'd appreciate your prompt answer,

Kind Regards,
 

Replies

Ghazi Osman
User offline. Last seen 8 years 2 weeks ago. Offline
Joined: 21 Jul 2011
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Dear Colleagues

Having designed 100% of the project clearly indicates that your client has elected to let the project on Build only basis ( contrasted to Design and Build) which sbsequently indicates that your client has been willing to accept the risks associated with inaccurate design and quantity calculations upfront. Accordingly I recommend providing BOQ to tenderers and rendering it contractual. I also recommend deploying a schedule of prices and rates for the sake of assessing variations and change orders forwhich this procurement option has significant potential.

I do obviousely argue that a lump sum contract will not be adequate for this case and your client would rather attempt other contractual arrangements such as GMP.

Regards

Cagdas Evren Bayrak
User offline. Last seen 4 weeks 1 day ago. Offline
Joined: 16 Oct 2008
Posts: 6

I've decided to put the BOQ's to the Form of Tender (not into the Contract Documents) for facilitating the proposal preparation of Tenderers and to better evaluate the proposals . The payments will be through a Pricing Schedule, which will be contractual.

vimal mohan
User offline. Last seen 6 years 46 weeks ago. Offline
Joined: 5 Jul 2009
Posts: 5

Better to provide both BOQ & SOP to contractor.

Mike Testro
User offline. Last seen 14 hours 33 min ago. Offline
Joined: 14 Dec 2005
Posts: 4393

Hi Cadgas

You said the designer has prepared the BOQ for you to calculate the Lump Sum.

If it is not your own take off then it is essential that the BOQ becomes a contract document in case there are inaccuracies in the billed quantities.

This works both ways of course because some could be over measured.

Best regards

Mike Testro

Sankar Vijayan
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Joined: 21 Sep 2010
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Hi Mr. Cagdas Evren Bayrak  Better not to issue BOQ .Usually In Lump sum Project no need of issuing BOQ. Its all contractors risk to calculate the quantity & do the costing so risk is with contractor.So better not to issue BOQ & make it a part of contract document    Regards  Sankar Vijayan