Your Client has write to varied the contract by adding, omitting or changing the character or quality or kind of any such works.
Nevertheless, he is not empoyer to remove part of the contract and given to other to perform or purchase on his own for economic reason. There are several court judgement in this regards.
You are entiltled to your Profit and overhead or unabsorbed over head and if you can proff it your loss in not accepting new contract offer (opportunity cost).
If your Client is paying you Profit and over head for the ommitted items good luck.
I hope you find this advic euseful
Kind regards
Member for
20 years 7 months
Member for20 years8 months
Submitted by Mohammed Owais on Fri, 2008-04-11 11:52
Its not clear to me how to apply Hudson or Emdens formula on my situation because those formulas using the delay peiod as a parameter and there is no delays in my case ,also you have to consider theres a Piping and Ducting works are done in Simultaneous with the machines fixing which the owner will pay us ,so, Can i know how to apply your mentioned formulas on my case ?
I am assuming that HOOH means Head Office Overheads.
If you can demonstrate that recovery of HOOH was included in your price breakdown for the ommitted machinery then you will be entitled to recovery.
If not then you may have to rely on either Hudson or Emdens formula which usually relates to EOT but would be equally valid for a large scope reduction.
Best regards
Mike Testro
Member for
20 years 7 months
Member for20 years8 months
Submitted by Mohammed Owais on Fri, 2008-04-11 08:35
Thanks all for your valuable replays , but what a bout unabsorbed HOOH ? Even my company will not supply the machines but still the period of the project not changed and well fix the machines (in addition to the piping and ducting works) according to the original Project Schedule plan so, still HOOH value is not changed after scope of work decreased becuase the price of supply & Fix the machines in the prices breakdown of the project was loaded by profit and some of HOOH.
So,do you think my claim has to include this share of unloaded HOOH value in addition to the loss of profit?
As always it depends on what it says in your sub-contract.
If your client is entitled to omit items from the contract then he can do so. What he cannot do is ommit work from your sub-contract and order it from someone else.
If he is bypassing you and ordering the kit from the manufacturers himself then that falls into a grey area.
You are at least entitled to your loss of profit and compensation for any design input.
Also be very careful regarding warranties and performance specifications - since you will not be responsible for the supply of the kit.
Best regards
Mike Testro
Member for
19 years 11 months
Member for19 years11 months
Submitted by Trevor Rabey on Thu, 2008-04-10 22:24
A change in scope is usually small in comparison to the overall value of the contract and it is usually considered to not amount to a change to the overall contract, which would require much more re-appraisal and formality. So it is just a variation and the contractor has to cop it.
A change in scope that causes a 40% decrease in the contract value is not a variation, it is a new contract which effectively supersedes the current contract.
You are now in a position where you have no contract. Good luck.
Member for
18 years 5 monthsRE: Claim for Decreasing Scope of Work
Hi mohammed
Your Client has write to varied the contract by adding, omitting or changing the character or quality or kind of any such works.
Nevertheless, he is not empoyer to remove part of the contract and given to other to perform or purchase on his own for economic reason. There are several court judgement in this regards.
You are entiltled to your Profit and overhead or unabsorbed over head and if you can proff it your loss in not accepting new contract offer (opportunity cost).
If your Client is paying you Profit and over head for the ommitted items good luck.
I hope you find this advic euseful
Kind regards
Member for
20 years 7 monthsRE: Claim for Decreasing Scope of Work
Hi Mike
Its not clear to me how to apply Hudson or Emdens formula on my situation because those formulas using the delay peiod as a parameter and there is no delays in my case ,also you have to consider theres a Piping and Ducting works are done in Simultaneous with the machines fixing which the owner will pay us ,so, Can i know how to apply your mentioned formulas on my case ?
thnx
Member for
19 years 10 monthsRE: Claim for Decreasing Scope of Work
Hi Mohammed
I am assuming that HOOH means Head Office Overheads.
If you can demonstrate that recovery of HOOH was included in your price breakdown for the ommitted machinery then you will be entitled to recovery.
If not then you may have to rely on either Hudson or Emdens formula which usually relates to EOT but would be equally valid for a large scope reduction.
Best regards
Mike Testro
Member for
20 years 7 monthsRE: Claim for Decreasing Scope of Work
Thanks all for your valuable replays , but what a bout unabsorbed HOOH ? Even my company will not supply the machines but still the period of the project not changed and well fix the machines (in addition to the piping and ducting works) according to the original Project Schedule plan so, still HOOH value is not changed after scope of work decreased becuase the price of supply & Fix the machines in the prices breakdown of the project was loaded by profit and some of HOOH.
So,do you think my claim has to include this share of unloaded HOOH value in addition to the loss of profit?
Member for
19 years 10 monthsRE: Claim for Decreasing Scope of Work
Hi Mohammed
As always it depends on what it says in your sub-contract.
If your client is entitled to omit items from the contract then he can do so. What he cannot do is ommit work from your sub-contract and order it from someone else.
If he is bypassing you and ordering the kit from the manufacturers himself then that falls into a grey area.
You are at least entitled to your loss of profit and compensation for any design input.
Also be very careful regarding warranties and performance specifications - since you will not be responsible for the supply of the kit.
Best regards
Mike Testro
Member for
19 years 11 monthsRE: Claim for Decreasing Scope of Work
Your contract was for supply and fix.
A change in scope is usually small in comparison to the overall value of the contract and it is usually considered to not amount to a change to the overall contract, which would require much more re-appraisal and formality. So it is just a variation and the contractor has to cop it.
A change in scope that causes a 40% decrease in the contract value is not a variation, it is a new contract which effectively supersedes the current contract.
You are now in a position where you have no contract. Good luck.