Certificate Which I Need To Issue For Subcontractor in Our in House Project

Comments are given in red fonts below:From: NOOPUR CHOURAGADE [mailto:noopur.civil@gmail.
com]
Sent: Tuesday, April 03, 2012 1:55 PM
To: Prof. Sam
Subject: PRELIMINARY HANDING OVER CERTIFICATE
Dear Sir,
Good Afternoon!!!
Thanks alot for Q & A .
Sir can you please provide me the Draft for PRELIMINARY HANDING OVER
CERTIFICATE which i need to issue for subcontractor in our in house project.
assume that we are Main contractor & Employer for our office building. its not related to
FIDIC. based on subcontract agreement only.
just guide me what are the things i need to mentioned in that letter.
Without studying the provisions of the subcontract, it is not possible to comment on an
appropriate Preliminary Handing-Over Certificate, which is a non-standard
document/function, and this short Q&A forum does not allow for such detailed study.
However, the following should be stated as a minimum in any taking-over certificate:a.
b.
c.
d.
e.
f.
Date of issue
Date on which the work was substantially completed (and therefore taken-over)
Date by which any outstanding work/snags should be completed.
Dates of commencement and completion of the Defects Liability Period.
Description of outstanding work/snags (as annexure).
Whether the Certificate is for Taking-Over of the whole of the Works or for Sectional
or Partial Taking-Over.
g. If it is for Sectional or Partial Taking-Over, then the approximate value of the
Section/Part taken-Over (for the calculation of release of Retention Money and
reduction of Liquidated Damages).
h. (If the Certificate is being issued for a non-standard purpose such as a
PRELIMINARY purpose, then it is better to mention what the next step is, such as a
FINAL taking-over and when that will happen).
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder
Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668
Thanking you sir.
regards
NOOPUR CHOURAGADE
ABU DHABI U.A.E.
From: pushpakumara rrr [mailto:wmn_pushpakumara@yahoo.com]
Sent: Wednesday, December 23, 2009 5:45 PM
To: sam99@eim.ae
Subject: Clarification
Dear Dr Sam,
Im working in a fix price lump sum contract project in Dubai and I am requesting your
comments, for the below mention omission.
My client needs to omit aluminum shading system from the contract as a cost saving (as per
the clause 51.1 (b))
According to the Boq cost for the above job 20million Dirham .So client accepting 20million
saving for the particular omission.
But current market rate, cost for the above job is only 4 million Dirham. As a lump sum
contract, contractor accepting only 4million Dirham as a discount.
Could you please explain,
1. How much the actual omission for the above job? Current Market Price (Dhs. 4 Million if
that is the current market price).
2. As per the clause 52.2 Engineer having any power to fix some figure for above
particular variation? If the parties cannot agree on the amount then the Engineer should fix
the value of the omission which should be the current market price.
The above method is used for the valuation because the remaining Dhs 16 Million would
represent what the Contractor would have gained, had he not been prevented from completing
the full scope of work.
(The parties are bound by the contract rates and prices only for variations which are
necessary or appropriate. Omission of the Aluminium Shading System cannot be considered
as a necessary/appropriate variation and therefore would amount to de-scoping)
(We discuss in detail the complications of de-scoping and the remedy of damages for breach
of contract available to the Contractor, during the Advanced Class. Next advanced class is in
Abu Dhabi on May 18th & 25th, 2012. No advanced classes are planned for Dubai, unless
the Alumni convey their interest.)
Regards,
Prof. Sam.

Thanks & Best Regards
Nuwan.
----- Original Message ----From: "ABRAHAM VARGHESE (alexmon)"
To: sam99@eim.ae
Date: Tue, 17 May 2011 09:50:43 +0400
Subject: UAE civil code
sir,
iam a student of advanced contract administration course . i would be grateful if you can
provide pDF copy of the civil code.
the version i have seems to be considerably different from the version used by you during the
advanced class.
regards
abraham varghese
I don't have the full copy. I have only selected articles used to provide advanced knowledge
in Contract Administration to the Alumni. You can photocopy the full Civil Code at Dubai
Chamber of Commerce and Industry Library. I am also searching for a word file or PDF for
the preparation of Master Class. If anyone has a copy I shall be grateful for a copy.
Regards,
Prof. Sam.

From: Joseph Ubald [mailto:joseph.ubald@dbasons.com]

Sent: Sunday, December 25, 2011 11:45 AM
To: 'Prof. Sam'
Subject: Prolongation and Disruption Cost
Dr. Sam,
Thank you for the knowledge that was passed on to all of us during the
sessions.
Q:
I understand that the Prolongation Cost and Disruption Cost are the
two components of the composite cause of Delay. It can occur
together or need not be. Prolongation Cost does not cover
Disruption Cost and vice versa. The Prolongation Cost is measured
in terms of site overheads and services provided during the
extended period and off-site overhead costs as well.
Please clarify my understanding is correct or need be corrected.

Correct to some extent. In order to allow prolongation costs, generally,
Employers/Consultants would also verify whether the delaying event
resulted in delaying the project completion.
However, there could be additional costs resulting from prolonged
resources of a non-critical activity (whilst the project completion is not
delayed) and such costs would therefore be claimed as disruption costs.
Also where acceleration is not considered, any thickening of resources
(related to trade activities or site overheads) would generally be claimed
as disruption costs.
(We only had time to deal with prolongation costs during the SCA and
Advanced course. Disruption and acceleration costs would be a topic in
the Master Class)
Regards,
Prof. Sam.

Regards,
Joseph Ubald
Contracts Department
From: Sakku Kuruvilla [mailto:Kuruvilla@ambb.net]
Sent: Wednesday, January 04, 2012 10:54 AM
To: 'sam99@eim.ae'
Subject: New Year greetings + Q&A
Dear Dr. Sam,

In a lump sum contract based on FIDIC 1987, Red book, where the BOQ provided is without
quantities (the contractor has to fill the quantity):
For changes, we measure the quantity of items changed and priced.
But for deletion of an item, we delete only the BOQ amount. Why it is not measured and
deducted at the rate in the BOQ.
Or am I wrong in saying that we should deduct the boq amount only, even if the boq quantity
filled by the contractor is wrong.
Since it is a lump sum contract the BOQ quantities should not be used for any purpose
whatsoever (irrespective of whether the quantities are provided by the Employer or the
Contractor).
Since the Quantities were not provided by the Employer, we cannot use the argument
discussed during SCA 1st Session that the rates would be inapplicable due to quantity error,
and therefore the rates would always be applicable to value variations. Accordingly, not only
any other changes but also omissions should be valued by using the actual re-measured
quantities of the omitted original scope of work multiplied by the existing rates.
Regards,
Prof. Sam.

Kindly clarify
Thanks & regards
From: kasun wickramanayake [mailto:kasunwick@gmail.com]

Sent: Thursday, January 12, 2012 9:09 AM
To: Prof. Sam
Subject: Cost Plus GMP Contract
Sir,
I have a problem in value engineering proposal.
The project is Cost Plus GMP Contract. The contractor submitted a value engineering for
parapet wall.
Original parapet is concrete now they have proposed for metal frame and clay tiles. The
contractor entitles a 25% of the savings from the value engineering.
My question is, since this is a cost plus project whether the savings to be compared with the
actual market rate for both original and the proposed or with the BOQ rates for original and
actual for proposed.
If the contract clearly states that the valuation of work is on a cost plus basis (and not using BOQ
rates), then the original scope and revised scope for the Boundary Wall should be priced using actual
costs for the revised, and likely but realistic costs (based on current market prices of
materials/resources) for the original.
Regards,
Prof. Sam.


Thanks & Regards

Kasun Wickramanayake
From: v v [mailto:vasu114@gmail.com]
Sent: Wednesday, April 04, 2012 8:13 AM
To: sam99@eim.ae
Subject: Re: Latest Q&A plus Important Message
Dear Professor
I would like to take this opportunity to thank you for shearing the Q&A with me.
Sir, i have a question if the Contractor is not increasing his man power to finish the works on
time when the time elapsed is over 60% and work done is only around 15%.
1. Can we as Consultants terminate his Contract if so on what grounds can this
happen.or do we have to wait till the LD period to over.
2. Can we reduce his scope of work and award to a different Contractor to finish in time
if so what are the steps to take.
The Conditions of Contract is ICTAD/SBD/1
If a contract does not have provisions similar to Clause 63 of FIDIC-4th Edition or Clause 15
of FIDIC 1999 to terminate the Contract (or the employment of the Contractor under the
Contract), when the Contractor is in breach or default (similar to the failure to perform stated
above), the law applicable to the contract would have remedies to remove the contractor and
to complete the works using others. However, depending on the jurisdiction (especially as in
UAE), a court order would be required (even where the FIDIC contracts clearly state that the
Employer can terminate).
(We discuss in great detail the termination provisions of FIDIC Contracts in relation to the
UAE law, during the advanced class, and also the difference between terminating the contract
and terminating the employment of the Contractor under the Contract).
Regards,
Prof. Sam.

Thanks and best regard,

Vasudeva
From: Ibrahim Bamgbopa [mailto:ibrahim@mucog.com]
Sent: Tuesday, February 21, 2012 1:37 AM
To: sam99@eim.ae
Subject: RE: CA-AC Q&A
Dear Prof
I will appreciate you elaborate the phrase free from liens and other
encumbrance
A property, though owned by one person could have a security interest by
another, or it may be mortgaged to another entity. A supplier could be retaining
the ownership until full payment is made for some Material/Plant, though
installed in the Works. In certain countries a Contractor can apply to the courts,
for him to have a lien over the Completed project until the Employer makes all
due payments.
Regards,
Prof. Sam.

Thanks sir, awaiting your usual supports.

Best regards,
From: Ibrahim Bamgbopa

Sent: Tuesday, February 21, 2012 12:53 AM
To: 'sam99@eim.ae'
Subject: RE: CA-AC Q&A
Dear Prof.
I have this problem that requires my urgent response on site, I will appreciate
your kind comments on this.
A partial commission of plant is scheduled for 25 th of February, 2012, albeit some
of the payment of the Contractor has been due since 15th of Dec 2011 as a result
the contractor hinges on the fact that since he hasnt been paid; technically the
ownership of the material is yet to be passed to the Client, though the material
have been delivered to the site.
I have found this clause in the FIDIC 7.7 [Ownership of Plant and Materials]
Each item of Plant and Materials shall, to the extent consistent with
the Laws of the Country, become the property of the Employer at
whichever is the earlier of the following times, free from liens and other
encumbrances:
(a) when it is delivered to the Site;
(b) when the Contractor is entitled to payment of the value of the Plant
and
Materials under Sub-Clause 8.10 [Payment for Plant and Materials in
Event of Suspension].
Sir I will appreciate your insight if this clause can be used or any other clause to
hold the Contractor from such delay of releasing the material for the slated
commission.
Since the material is delivered to the site, it has become the property of the
Employer. If the Contractor has not given the requisite notice to
suspend/decelerate the progress of the work due to late payments, he is not
permitted to delay the commissioning.
Regards,
Prof. Sam.

Best regards,
Ibrahim
From: Nayana Seneviratne [mailto:nayana138@yahoo.com]
Sent: Sunday, February 12, 2012 1:57 AM
To: sam99@eim.ae
Subject: Prof. could you please advise
Dear Prof.Good Morning,

Our project is IT complex, include 4towers,4 services buildings. treditional, Lump Sum
contract.client is Government and form of contract is bespoke.
project was 90% designed at the time of tender.
Since the government. law article states that gov. tenders should provide correct complete details to
the tenders and bespoke contract Article (10) provide provision stating that the contractor should
review the complete design including sub surface (provide separate Article) and Article (8) of special
conditions provide provision stating that, if he found any technical or design mistakes during the
construction process, he should notify to the employer, correct himself and construct his own cost
etc.
However, contractor raised a claim asking additional cost for the design mistakes which he found
between the tender and contract doc. including the mistakes found during the construction process.
his claim grounds on the Government law.
My query is; all contracting parties were sign the contract with clear understanding and clear
intension.
In fact, Should we give priority to Agreed Basis of the contract or Gov. Law requirement? Please
comment.
If the balance 10% of the design was made available via the Contract Documents, the Contractor
does not appear to have a valid claim regarding design mistakes that he could have reasonably
found prior to the signing of the Contract.
If the balance 10% of the design was made available during the post contract stage, the Contractor
would have a valid claim regarding design mistakes found later, within that 10%.
Regards,
Prof. Sam.

Nandana
From: antonycruz prabhu [mailto:rajprabhu1976@hotmail.com]

Sent: Sunday, April 15, 2012 10:22 AM
To: sam99@eim.ae
Subject: Issue in site
Dear sir
I have an small issue in my site.
Our contract says only 75% of rebar should be certified in Payment certificate and our
minimum payment for the contractor should be 15 million. Due to this the contractor
to bring his payment application 15 million he is adding a huge amount for material
on site (delivery notes attached) crosspondingly the progress of work is less. If this is the
situation how we can stop the contractor from claiming a huge amount on material on
site.
Most contracts suffer from Contractors failure to procure material in a timely manner. All
materials brought to site should be paid for as provided in the contract (unless there is a
clause in the contract preventing the contractor from bringing material on site,
prematurely.)
Regards,
Prof. Sam.

Regards
prabhu
From: antonycruz prabhu [mailto:rajprabhu1976@hotmail.com]
Sent: Thursday, May 03, 2012 8:44 AM
To: sam99@eim.ae
Subject: Dispute resolution
Sir
My Question is
As a part of dispute resolution mediation can be accepted to solve any disputes may arisen
between the employer and contractor.
So my questions are :
- Does the mediation agreement binding for both parties? In case of YES
- How the agreement can be enforced under UAE law?
-What are the agreement conditions and its characteristics to make it valid? (the conditions
which should be met).
Generally the outcome of a Mediation is nonbinding and therefore not enforceable, unless the
two parties sign a specific agreement to make it binding/enforceable. The basic requirements
of a legally binding contract (as discussed in detail during the 7th Session of SCA) should be
present in such an agreement, and in addition, the advice of a local lawyer should be obtained
to ensure that the wording would not leave room for the other party to challenge the
Mediation outcome except in the limited circumstances (as discussed during the 9th Session of
SCA) in relation to the Arbitration Law of the UAE.
(Alumni who wish to refresh on any Sessions of the SCA can get a 50% discount at the SCA
June class in Dubai starting on 8th June, 2012. Details are attached and please also pass to
those who can benefit from this unique training in contract administration)
Regards,
Prof. Sam.

regards
raj
From: Glennie [mailto:glenn99dtci@gmail.com]
Sent: Friday, May 04, 2012 11:17 AM
To: Prof. Sam
Subject: Re: Abu Dhabi Advanced Class
Dear Professor,
I am an SCA Alumini,
I have a confusions, which need your guidance,
If a Subcontractor for the Main Contractor having a Design responsibility, who will
give/obtain the PI insurance to cover his scope of work. But here, the
issue is Employer and the Subcontractor do not have a Contract between
them; and if the Employer wants to indemnify due to the
design deficiency, how he can claim under PI given by the subcontractor.
Where any part of the Works (including any subcontract works) has to be designed by the
Contractor (or his subcontractor), the Main Contract always carries a provision for the Main
Contractor to provide PI insurance to the Employer. If the Employer/Consultants forgot to
include this provision, then it should be added as a variation, and when the Main Contractor
provides the PI insurance, it should be paid for by the Employer. The Subcontractors PI
insurance is only a back-to-back cover to enable the Main Contractor to get better premiums
from his insurance provider.
Regards,
Prof. Sam.

Best Regards
Glennie
----- Original Message ----From: Laeeq Hassan
To: "Sam Dr." <sam99@eim.ae>

Date: Tue, 10 Apr 2012 09:42:52 +0000
Subject: Prolongation Calculation
Dr. Sam
Good Day!
As per Condition of Contracts of one of the Government Client in Muscat,
Oman, which is bespoke FIDIC 87. Contractor have submitted their EOT
and prolongation cost claim to the Engineer. they have reviewed and
prepared their draft recommendation.
Wherein, we as a Contractor have concern related to one of the Prelims
items 115 Compliance with the Tender Document Allow for all costs and
expenses for complying with all the conditions and requirements
stipulated in the Tender Documents, including all Clauses of the Standard
Conditions of Contract, which the Tenderer considers have financial
implications on his tender and which are not covered separately in the
pay items of the Bill of Quantities except Clauses 10,21,22,23 & 24. This
item has been devided into two parts Supervision & Transportation
with a Lumpsum amount in it.
As per preamble, regarding payment is says the tendered lump sum for
each Clause in this items is deemed to cover the Whole of the Contract
Period. Monthly payments against this item shall be made in installments
proportionate to the value of work executed at the present certificate
issued by the Engineer except item No 106.1.
Moreover, special Specs add one more sentence The extra payment shall
be made only proportionate to the net value of each variation order.
Contractor Calculation: Boq Lumpsum/project duration x EOT months
Engineer Calculation: Lumpsum/total project value x value of VO.
As per the Engineers computation there is immense difference. Can we as
Contractor ask them to go for actual cost and substantiate OR is there
any Contractual clause support us to argue and convince them. Is there
any option or not? Probably under SCL protocol.
Copies of Preambles and Special Specs are attached for your reference.
(In this short Q&A forum, questions should be brief and no attachments should be sent).
Unless both parties agree to calculate using one of the above two bases, if the matter develops
into a dispute, the arbitrator/court would always require the actual cost to be calculated for
compensation as the cause of delay resulting from an event for which the Employer is
responsible is considered a breach and therefore damages are calculated as actual loss and
expense.
Regards,
Prof. Sam.

Regards,
Laeeq
Muscat - Oman
From: @gmail.com]
Sent: Tuesday, April 03, 2012 1:55 PM
To: Prof. Sam
Subject: Re-Measurement
In our contract, the method of measurement is stated as POM(I), but there are some items in
the BOQ which are not measured in accordance with POM(I), and there is no mention that
there is a deviation from POM(I) or specific mention about any other Standard Method used
for those items. How should we value the completed work and variations ?
If the contract clearly states that the method of measurements is POM(I), and if it is a remeasurement contract, then any items of original scope of work given in the BOQ which do
not comply with POM(I), should be re-measured on completion of the Works, to comply with
POM(I) and valued using either the BOQ rates, or where they are not applicable, then using
fair and reasonable rates.
All other items of the original scope of work should be re-measured on completion of the
Works, in accordance with POM(I) and valued using the BOQ rates. If there is no item in the
BOQ for any original scope of work, then it should be re-measured on completion of the
Works, in accordance with POM(I) and valued using either the BOQ rate for a similar item,
or where there is no similr item, then using a fair and reasonable rate.
All variationsshould be re-measured on completion of the variations, in accordance with
POM(I) and valued using the BOQ rates for similar items, or using them as a basis, or where
they cannot be used as a basis, then using fair and reasonable rates.
Regards,
Prof. Sam.


----- Original Message ----From: VATTIKUTI SATYANARAYANA

To: sam99@eim.ae
Date: Sun, 15 Jan 2012 18:28:29 +0530 (IST)
Subject: P&OH on Variations
Dear Sir,
Could you please clarify the followingOur tender break up constitutes 33.34% P&OH. Is the same P&OH shall be granted by the
Engineer or shall have liberty to reduce on new items which have no basis in the BOQ rates
and prices
As we discuss during the 5th Session of the Advanced Course, the % of OH & P to be added
to the new rates for variations should be the same % of OH & P contained in the existing
BOQ rates. It cannot be reduced by the Engineer. If the % is considered to be high then the
option available to the Engineer is not to instruct the Variation if the Employer is not prepared
to pay that high price.
(Valuation of variations under FIDIC 1999 is very complex, and the major difficulty is the
absence of a separate clause for valuation of variations as in FIDIC 4th Edition. In FIDIC
1999 it is combined with the valuation of original scope of work!)
Regards,
Prof. Sam.

Regards
V.Satyanarayana
Member SCA/ACA

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Comments are given in red fonts below:From: NOOPUR CHOURAGADE [mailto:noopur.civil@gmail.

Arbitrator / Mediator - London Court of International Arbitration

Thanking you sir.

Arbitrator / Mediator - London Court of International Arbitration

Thanks & Best Regards

Arbitrator / Mediator - London Court of International Arbitration

From: Joseph Ubald [mailto:joseph.ubald@dbasons.com]

Please clarify my understanding is correct or need be corrected.

Arbitrator / Mediator - London Court of International Arbitration

Dear Dr. Sam,

Arbitrator / Mediator - London Court of International Arbitration

From: kasun wickramanayake [mailto:kasunwick@gmail.com]

Prof. Indrawansa Samaratunga PhD, DSc

Arbitrator / Mediator - London Court of International Arbitration

Thanks & Regards

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE

Thanks and best regard,

Arbitrator / Mediator - London Court of International Arbitration

Thanks sir, awaiting your usual supports.

From: Ibrahim Bamgbopa

Arbitrator / Mediator - London Court of International Arbitration

Dear Prof.Good Morning,

Arbitrator / Mediator - London Court of International Arbitration

From: antonycruz prabhu [mailto:rajprabhu1976@hotmail.com]

Arbitrator / Mediator - London Court of International Arbitration

Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Mediator - London Court of International Arbitration

To: "Sam Dr." <sam99@eim.ae>

Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Mediator - London Court of International Arbitration

Middle East Representative - Australian Inst. of Qty. Surveyors

----- Original Message ----From: VATTIKUTI SATYANARAYANA

Arbitrator / Mediator - London Court of International Arbitration

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