When and How Suspension evolves to Omission under the 1999 FIDIC Red Book?

“Under various circumstances, prolonged suspension allows the Contractor to treat suspension as an omission.”

In our case; the Engineer instructs the Contractor to suspend a part of the Works.

The Contractor stops the related part of the Works.

During the suspension period, the Contractor fulfills its duty to protect and secure the Works.

Considering that the Engineer may any time decide resumption, the Contractor provides its personnel and equipment ready.

But, the suspension continues for more than 84 days.

The Contractor asks for permission to proceed but can not get any response within 28 days.

After giving a second notice, the Contractor treats suspension as an omission of the affected part of the Works.

So in the end;

The Contractor gives a Notice for the protection related costs.

The omission is valued in accordance with Clause 12 [Measurement and Evaluation].

And, the Contractor is paid the value of the materials which have not been delivered to the site.

In this document, you will find the key issues and the procedure to be followed in the event of suspension’s evolution to an omission under the 1999 FIDIC Red Book.

1   The Engineer Instructs Suspension

In accordance with Sub-Clause 8.8 [Suspension of Work];

The Engineer may instruct the Contractor to suspend a part or all of the Works.

In the event of suspension, the Contractor secures parts or the Works against loss or damage.

2   Entitlement to Payment for Plant and Materials

The Contractor shall be entitled to payment of the value (as at the date of suspension) of Plant and/or Materials which have not been delivered to Site, if [1];

The work on Plant or delivery of Plant and/or Materials has been suspended for more than 28 days, and

The Contractor has marked the Plant and/or Materials as the Employer’s property in accordance with the Engineer’s Instructions.

3   The Suspension Exceeds 84 Days

In accordance with Sub-Clause 8.11 [Prolonged Suspension];

When the event of suspension continues for more than 84 days,  The Contractor requests the Engineer’s permission to proceed.

4   The Contractor Treats Suspension as an Omission

In accordance with Sub-Clause 8.11 [Prolonged Suspension];

Within 28 days after being requested, if the Engineer does not give permission to proceed, the Contractor gives notice and treats suspension as an omission under Clause 13 [Variations and Adjustments] of the affected part of the Works.

5   The Contractor Gives Notice for the Costs

In accordance with Sub-Clause 8.9 [Consequences of Suspension];

In case of any delay or cost in line with the Engineer’s instructions in accordance with Sub-Clause 8.8 [Suspension of Work], the Contractor is to give Notice to the Engineer and be entitled subject to Sub-Clause 20.1 [Contractor’s Claims] to;

An Extension of Time, if completion is or will be  delayed under Sub-Clause 8.4 [Extension of Time for Completion], and

Payment of any such Cost that will be added to the Contract Price.

The Engineer is to continue in accordance with Sub-Clause 3.5 [Determinations] to agree or determine these issues.

6   Valuation in accordance with Clause 12

Whenever the omission of any work forms part (or all) of a Variation, the value of which has not been agreed, if [2];

(a) The Contractor will incur (or has incurred) cost which, if the work had been omitted, would have been deemed to be covered by a sum forming part of the Accepted Contract Amount.

(b) The omission of the work will result (or has resulted) in this sum not forming part of the Contract Price, and

(c) This cost is not deemed to be included in the evaluation of any substituted work

Then the Contractor shall give Notice to the Engineer accordingly, with supporting particulars. Upon receiving this notice, the Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine this cost, which shall be included in the Contract Price.

FOOTNOTES

1. The same Sub-Paragraph letters are used as in Sub-Clause 8.10 of the 1999 FIDIC Red Book.

2. The same Sub-Paragraph letters are used as in Sub-Clause 12.4 of the 1999 FIDIC Red Book.

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