Page 236 - Civil Engineering Project Management, Fourth Edition

Civil Engineering Project Management
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receive his costs ‘reasonably incurred’ in overcoming unforeseen conditions,
‘together with a reasonable percentage thereto in respect of profit’.
In this first interim account the contractor will no doubt wish to include the
cost of dealing with the unforeseen conditions some days before actually sub-
mitting his Clause 12 claim, and this is not unreasonable. ‘Unforeseen condi-
tions’ do not always happen suddenly, they can be conditions which worsen
gradually, causing the contractor increasing difficulty and delay as he tries to
deal with the situation, until he realizes he has the basis for a Clause 12 claim.
Until then the contractor may have no special records for that part of the work.
So his ‘first interim account’ under Clause 53 may be sparse on detail but contain
a large sum for work on the unforseen conditions before he sent in his claim.
While only the engineer can finally decide what should be paid, the work of
finding out all costs ‘reasonably incurred’ will fall upon the resident engineer.
Using his own records and the contractor’s, he should endeavour to find data,
which supports the contractor’s claim.
Direct costs in meeting unforeseen conditions will comprise labour, materials
and plant used. These should be ascertainable from records or, where these
are not detailed enough, by judging what must reasonably have occurred, such
as labour standing time or uneconomic working as problems created by the
unforeseen conditions cause delay or the need to get more plant. Materials costs
may have to include abortive temporary measures, such as timbering or tem-
porary concreting. Plant costs may have to be divided into plant working and
plant standing.
Indirect site costs comprise salaries and allowances for site staff, transport,
office costs, plant maintenance, services and ‘consumables’ of all kinds that it
may be impracticable to consider in detail. The contractor may be able to show
what ratio they bear to gross labour costs; if they can only be shown in total to
date, the current ratio has to be estimated, since the ratio will be higher in the
early stages of the contract when site offices and services, etc. have to be set up,
than later when more productive work is being undertaken.
Overhead costs for head office management and profit – usually expressed as
a percentage on – have to be justified by the contractor showing they are in line
with his usual practice.
Where some costs are difficult to elucidate due to lack of records, there are
various estimating books published annually which can provide guidance, or
be used as a check on the contractor’s submissions.
When the unforeseen conditions occur and the contractor notifies his inten-
tion to make a claim in consequence, the engineer should report the matter to
the employer. He should take into account the employer’s views as well as
the contractor’s when considering whether the conditions could ‘not reasonably
have been foreseen by an experienced contractor’. The employer may also
require to be consulted on the contractor’s claims and take part in meetings
with the contractor about them. Under the ICE conditions the decisions finally
rest with the engineer, but he should endeavour to get agreement beforehand
to his proposed decision from both contractor and employer, or at least their
understanding of the reasons for his decision.